SIEM REAP, Cambodia — The United States on Friday reaffirmed its military ties with the authoritarian government of Prime Minister Hun Sen, a former Khmer Rouge commander, but Defense Secretary Leon E. Panetta also warned the country about its long record of human rights abuses.

After attending a regional security conference and a separate meeting with Gen. Tea Banh, Cambodia’s defense minister, Mr. Panetta said he wanted to emphasize the support of the United States “for the protection of human rights, of civilian oversight of the military, of respect for the rule of law and for the right of full and fair participation in the political process.”

Mr. Panetta was in Cambodia as part of the Obama administration’s “pivot” to Asia that seeks to bolster military, economic and diplomatic relationships in the region and serve as a counterweight to China’s rising influence. His visit came four days ahead of a planned trip here by Secretary of State Hillary Rodham Clinton and President Obama, who will be the first sitting American president to visit the country.

The trips have drawn criticism from human rights groups, who say the administration, in its rush to make strategic friends in the region, is ignoring the record of people like Mr. Hun Sen, who has a bloody, decades-long history of crushing political dissent. A Human Rights Watch report released this week recounted numerous killings of labor leaders, journalists and opposition leaders in Cambodia over the last 20 years.

Cambodia has long and close ties to China, but United States Special Forces are now providing counterterrorism training to the Cambodian military and the two countries also conduct small-scale joint exercises. Still, the defense relationship is in the early stages and Mr. Panetta’s aides said the Pentagon remained wary of stepping up the military relationship with Mr. Hun Sen’s government.

Mr. Panetta announced no major American-Cambodian initiatives — called “deliverables” in the shorthand of government — as a result of his visit. Aides traveling with him said the main accomplishment was the symbolic value of the American defense secretary’s attending the regional meeting, a gathering of Southeast Asian defense ministers that previous administrations have ignored.

“The big deliverable in Cambodia is the secretary himself,” a senior defense official said.

Mr. Panetta did announce additional joint American military exercises with Indonesia, Malaysia, Australia and Brunei. He also spoke over lunch on Friday with the defense minister of Myanmar, also known as Burma, which Mr. Obama will visit in his trip next week — another first for an American president.

On a stop earlier this week in Perth, Australia, Mr. Panetta announced that the Pentagon was moving two surveillance systems — an advanced C-band radar system and an optical telescope built by the Defense Advanced Research Projects Agency — to Australia. The systems will allow the United States to track space debris as well as satellites, including those of China. The radar is currently situated in Antigua and the telescope is in New Mexico.

In Bangkok, Mr. Panetta signed a new defense cooperation agreement with the Thai government, updating an existing one that was signed in 1962 by the American secretary of state at the time, Dean Rusk.

Relations between Germany and Russia are tenser right now than they have been in months, with Berlin becoming more open about Moscow's human rights shortcomings. But a prominent human rights activist argues that Chancellor Angela Merkel should take advantage of her "enormous personal authority" to do more.

SPIEGEL ONLINE: How severely has the human rights situation deteriorated since Vladimir Putin returned to his role as Russia's president earlier this year?

Denber: What we have seen since his May 7 inauguration has been one shocking, demonstrative move after another. During the Colored Revolutions of 2004-2005, Russia ushered in a new era of managed democracy and authoritarianism. During the Dmitry Medvedev era, a slight loosening of the screws happened. Then, through a combination of alleged fraud in the parliamentary elections and the announcement that Putin and Medvedev would switch places, a raw nerve was struck with many people who felt they were being infantilized. A protest movement began.

SPIEGEL ONLINE: The Kremlin, of course, has not responded with much understanding to this hint of civic uprising.

Denber: We are now seeing a reaction to not only reverse whatever happened under Medvedev, but also steps that take things back to a higher level of authoritarianism. This is happening because the Kremlin never again wants to face the prospect of humiliating street demonstrations. They want to return to an era when the Kremlin was in complete and total control of the policy process and outcomes.

SPIEGEL ONLINE: What new Russian laws have proven most problematic from a human rights perspective?

Denber: The new demonstrations law imposes stiff new penalties on unsanctioned protests that are sometimes 30 times higher than the old fines, as well as introducing new restrictions on protests. And new Internet restrictions at the federal level essentially create a registry of blacklisted web content that can be decided on by courts if they deem it to be extremist or by the executive branch or local authorities if it is deemed harmful to children. The criteria for making these decisions is arbitrary and it could lead to the shutting down not only of individual websites, but also social networking platforms like Facebook or its Russian equivalent. Then there is the NGO law, which requires any Russian NGO that obtains foreign money to register as a "foreign agent." If they don't, they can face criminal penalties. What could possibly be the purpose of that except to create the image of an enemy? Then last month they made amendments to the anti-treason law to include the sharing any kind of material -- technical, financial, advisory or other assistance to any foreign organization, foreign state, their representatives or international organizations that is directed toward "harming" Russian security. That's pretty broad.

SPIEGEL ONLINE: You've said it is almost as if the Kremlin were adhering to a schedule in introducing these laws.

Denber: Each of these pieces of legislation were adopted with extraordinary speed. There have been other developments, too. This may not be a human rights move, but it was shocking to see USAID get kicked out of Russia. Then UNICEF. There is also unprecedented anti-foreigner rhetoric and a number of cases going on like Pussy Riot. Whatever you think about what they did in the cathedral, however offensive you think it was, I don't think any normal criminal court would have found that sufficient enough to put you in jail for two years.

SPIEGEL ONLINE: How great is the risk these laws will be enforced?

Denber: What they are doing is creating a massive gray space of legal ambiguity and of intimidation to deter people from getting involved in civic activity -- to cut off the next generation of human rights activists and investigative journalists, or even people who might have some kind of alternative vision to promote.

SPIEGEL ONLINE: The West has certainly responded to all of these developments. Is this having any influence whatsoever in Moscow?

Denber: The Kremlin is listening very closely. But there is a new rhetoric and an attitude of defiance and aggression intended to intimidate foreign governments and international organizations. One of the main ideas behind having human rights standards is that when human rights violations happen, it is never just the internal matter of a country. The Kremlin is really trying to shift that, and it will be truly sad if Russia's partners buy into this.

SPIEGEL ONLINE: In Germany, parliament passed a resolution last week demanding that, in its dealings with Russia, the German government push for the "European values of rule of law, human rights and democracy to be applied (by Moscow) in its general dealings with civil society actors." Does Berlin have the kind of influence over Russia that German politicians would like to believe?

Denber: Germany has a very, very important relationship with Russia. It is Russia's most important bilateral partner and the same holds true for Germany. Their partnership has had a difficult history and there is a lot of baggage, but they are extremely important trading partners to each other.

SPIEGEL ONLINE: But is the rhetoric Russia uses against Germany really all that different from that applied to other Western countries?

Denber: For now, there is a totally different rhetoric towards Germany than there is against other Western countries, particularly the United States. You don't hear the Kremlin making ridiculous claims about Germany similar to their accusation that US Secretary of State Hillary Clinton paid to stage protests in Russia. Russia is trying to paint the US as an aggressive, dangerous force in the world that uses military intervention to get its way. It sees the US as trying to refashion the world and forcibly "export democracy."

SPIEGEL ONLINE: Nevertheless, there has been intense criticism in Moscow of Andreas Schockenhoff, the initiator of the resolution and Merkel's coordinator for cooperation with Russia.

Denber: Their strategy is to see if Germany is going to stand behind him. I don't see any evidence that Berlin is going to hang him out to dry. He has a very sharp analysis of what is going on in Russia today. Russia is trying to swift-boat a man who has spent years working on German-Russian relations. To smear him suggests real anxiety.

SPIEGEL ONLINE: In 2004, former Chancellor Gerhard Schröder described Putin as a "flawless Democrat." His policies toward Russia bordered on fawning and he even later went to work for a Russian pipeline project. Has the relationship changed significantly under Merkel?

Denber: Not overall. I haven't seen any move to de-emphasize the importance of relations with Russia or any scaling back of ties. Merkel, however, has been more willing to raise issues and she has certainly been stronger than Schröder on human rights. When our colleage Natalya Estemirova was murdered in 2009, it happened on a day when she had a meeting with Medvedev, and she spoke to him about it. Not every leader would do that.

SPIEGEL ONLINE: Given Merkel's role in the international community, could Germany do more to help harmonize Russia's approach to human rights with that of the West?

Denber: Putin views international engagement on human rights as a power issue. The Kremlin's vision of human rights is this: If you're weak, you get picked on. Germany has a lot of clout and Merkel has considerable gravitas and enormous personal authority. These are all assets that can help deliver concrete results. It is difficult to think of any other actor on the world stage that is better placed to talk seriously about the need for an open society with the Russian government than Germany. Merkel needs to make clear that the direction Putin and the Kremlin are taking Russia in today is warping deep ties between Russia and the EU and taking the relationship in an unconstructive direction.

SPIEGEL ONLINE: The position at Human Rights Watch is that the EU should drop its "business as usual" approach to Russia. What does that mean?

Denber: We are in a defining existential moment now. Russia's shock and awe campaign represents a dramatic departure that requires a dramatic response. You often hear from EU leaders that human rights is already a part of their conversation with the Russians, but it isn't the number one issue and it really needs to be. The EU also needs to come to a common position on Russia.

SPIEGEL ONLINE: What keeps Europe from acting more decisively against Russian human rights abuses? Is there a general fear of the country?

Denber: Russia views the EU as weak and they probably see this as a moment to act. It's not easy to agree on a strong position on civil society in Russia among all EU partners because different member states have different agendas. Russia is part of the Council of Europe (Europe's human rights organization), and the EU needs to point out to Moscow that we all have the same human rights obligations. But there are very smart people at the Kremlin and the Russian Foreign Ministry and they know how to divide and conquer. Putin's peevishness, the sneering way in which he has responded to reflections about human rights developments in the country, is very revealing. It shows that, at some level, the Russians care deeply -- otherwise they would shrug it off and walk away. But it also has the effect of making people not want to raise these issues because no one wants to deal with that kind of reaction.

SPIEGEL ONLINE: Or, presumeably, the potential economic consequences. Europe's dependence on Russian natural gas is never far from the debate.

Denber: It's a problematic knee-jerk reaction in Europe -- the assumption that if we raise human rights issues, then the Russians will cut off the gas. That totally oversimplifies the nature of economic interdependence between Russia and the EU. Yes, there is a high dependency in Europe on Russian natural gas, but that also means there is a high reliance in Moscow on Europe purchasing that gas.

YANGON, Myanmar — The center of Yangon is filled with signs that capitalism is on the march in this former socialist military dictatorship. Coca-Cola and Pepsi compete on billboards, a car dealership seems to open every week, and hawkers sell copies of the new Foreign Investment Law to motorists stuck in traffic — the clogged streets a perverse but potent symbol of the country’s transformation.

But 45 minutes away, on the outskirts of the city, is a different Myanmar. Children splash in filthy puddles along deeply rutted roads, and day laborers sleep away the afternoon in rickety wooden shacks awaiting jobs that come too rarely.

“Things have been the same here for 20 years,” Daw Thein Yi, 53, said as she watched over her grandchild while slapping wet laundry against a stone.

Residents of the sprawling suburban slum, known as New Dagon Township South, have little of the hope and expectation voiced in central Yangon about the democratic changes that have helped open up one of the world’s most reclusive countries and helped inspire a visit by President Obama on Monday — the first by an American president.

U Sein Maung, a 50-year-old day laborer and father of four, squinted in puzzlement when asked about the pending visit. “We didn’t hear he was coming,” he said.

Twenty months of sometimes breathtaking economic and political changes in Myanmar under the civilian government of President Thein Sein have touched only a sliver of the country’s 55 million people, those tracking the process of change say.

“Most of the changes have happened in the upper parts of society,” said U Yan Myo Thein, a former political prisoner who frequently writes commentaries for Myanmar’s news media.

It may be too soon to expect broad portions of the country’s impoverished population to benefit from overtures to the world and its businesses. But some in Myanmar are concerned that the failure to reach the indigent majority points to wider problems with an overhaul program trying to free the country from the legacy of its military and socialist era.

“The government has not yet succeeded in unleashing the market,” said U Phone Win, director of a law firm, Maw Htoon & Partners, that advises foreign companies looking to invest in the country.

Mr. Phone Win says small businesses remain frustrated by thickets of restrictions and the hierarchical habits of government employees used to working for military leaders. Even something as basic as opening a restaurant, shop or boutique hotel can be blocked by bureaucrats accustomed to waiting for superiors’ orders.

At the high end, Mr. Phone Win says, he has hosted a parade of foreigners looking to invest in the country. Many leave unfulfilled. “Billionaires are coming here on their private planes, but no one can make deals,” he said.

The common refrain among foreign investors these days is “wait and see.”

Before elections in 2010, Myanmar was both one of the most brutal dictatorships in Asia and a closed, command economy where government factories churned out a variety of items like soap and bicycles.

Since then, Mr. Thein Sein, a former general, has moved the country rapidly away from its dictatorial past, hoping to revive an economy eroded by decades of inept leadership and corruption. Those changes, including freeing political prisoners and allowing multiparty elections, have earned cautious accolades and led the United States and others to ease sanctions meant to cripple the junta. (On Friday, the United States followed through on earlier promises, saying it would allow most goods from Myanmar, also known as Burma, to be imported for the first time in almost a decade.)

Easing the various sanctions opened the country to a flood of curious would-be investors hungry for the country’s natural resources and eager to sell to a population that had little in the way of modern conveniences like cars and cellphones.

Stephen Groff, vice president of the Asian Development Bank, the Manila-based institution that re-engaged with Myanmar this year after a 25-year absence, compared the economic changes here to the liberalization of Vietnam’s economy, which began allowing free enterprise in the late 1980s. In both countries, changes came from within the leadership and thus were much more gradual than the convulsive uprisings seen, for example, during the Arab Spring.

The streets of Yangon today testify to that relative stability. Residents say violent crime remains rare in central Yangon, despite ample opportunities for theft. Because credit cards have been introduced only in recent months and banks remain dysfunctional, residents carry around large amounts of cash. Secretaries and office workers use rice sacks to haul stacks of money for their businesses.

But continuity and stability also mean that the same government workers who served under the highly repressive junta are now responsible for breaking down the system they helped build.

“The legal and regulatory environment and the financial system remain very, very weak and underdeveloped,” Mr. Groff said.

Advisers to the government who are helping introduce new policies say changes coming from Mr. Thein Sein’s office are being bogged down at lower levels in the government.

“The international community expects too much — they need to lower their expectations,” said U Tin Maung Than, director of the Myanmar Development Resource Institute, a research organization with close ties to the president’s office. “And the people need to lower their expectations, too.”

For Mr. Sein Maung, the day laborer, expectations could not be much lower.

He has no refrigerator, television or anything that runs on electricity, save a single neon bulb that hangs from the ceiling. His wife and four children sleep on the uneven planks of the shack he built from scratch.

As he answered questions from a reporter — a rare outside visitor to the slum — he held his 4-month-old boy. What will become of his son in the new Myanmar?

“He will never be rich,” Mr. Sein Maung said matter-of-factly. “There’s no way for people like us to get rich. We just hope he gets an education.”

Economic crisis and mass unemployment in Southern Europe have triggered an exodus of highly qualified jobseekers, many of whom are making their way north to Germany. There, a relatively strong economy and growing shortage of skilled workers makes companies eager to ensure that the newcomers feel welcome.

Ziehl-Abegg, a mid-sized specialist in ventilation technology based in the southwestern German town of Künzelsau, recently welcomed two new engineers from Portugal, and a third is on his way.

"We always take them under our wing," says company spokesman Rainer Grill. "Our employees take the new arrivals to soccer games or go bowling with them."

Attracting skilled foreigners -- and making them want to stay -- is crucial for the company and its 800 employees. "We need specialized mechanical engineers, and we always have positions to fill," Grill says.

As odd as it might sound, the euro crisis has been a boon to companies like Ziehl-Abegg, and the flood of qualified jobseekers fleeing mass unemployment and recession in Southern Europe shows no signs of abating. Indeed, in the first half of 2012, some 182,000 of them came to Germany -- a 35 percent rise over the same period in 2011. The number of Portuguese and Spaniards in the country has doubled over the last year, while the number of Greek immigrants has risen by 78 percent. There's also been an influx of Hungarians.

"It's great for Germany," says Herbert Brücker, an expert on migration at the Nuremberg-based Institute for Employment Research (IAB), the research arm of Germany's Federal Employment Agency. Some 50 to 70 percent of immigrants are university graduates, he explains, with much-sought-after degrees in scientific and technical subjects. However, Brücker also notes that there's plenty of demand for caregivers and nurses.

What's more, these new employees also have a positive multiplier on the German labor market: Every time an engineer is hired, a number of specialists and support staff are hired as well.

Media coverage of these hiring gaps has only heightened Germany's appeal as a job destination. After a Portuguese TV team reported on the trouble Ziehl-Abegg was having filling open positions, its personnel department was inundated with some 1,500 applications, mainly in Portuguese and English.

"It took us months to work through them all," says Grill.

Obstacles and Trends

Even after the hires were made, it took a while for the new foreign employees to fit in. "To begin with, our new Portuguese colleagues didn't speak a word of German," Grill explains. The company assigned an employee to help them get over bureaucratic hurdles and handle logistical issues, such as buying a car. Ziehl-Abegg also rents a building of apartments that it lets new employees use when they first arrive in town. "In the long run, they obviously have to find their own way, but they need a while to see what kind of apartment they can afford," says Grill.

Despite the difficulties, Grill is confident that the investment will pay off for the company. "We want our employees to feel comfortable here," he says. "If they don't, we will have wasted the cost of settling them in, and they'll disappear the minute someone offers them an extra €500 a month."

Indeed, Ziehl-Abegg isn't the only company benefiting from skilled workers from southern countries. In early December 2011, the Stuttgart Region Economic Developmetn Corporation (WRS) launched an initiative called "Aktion Nikolaus," with which it invited 100 Spanish engineers to a trade fair for medium-sized industrial companies. Of these Spanish engineers, 22 have already found jobs with small or medium-sized companies in the Stuttgart region, and another 11 elsewhere in Germany. "It was a major success," says WRS managing director Walter Rogg.

Although the initiative was planned as a one-off, Rogg is now hoping to make it a regular event. As he envisions it, the Spanish engineers will take a month-long language course followed by an internship in a company that would ideally go on to hire them.

The IAB's Herbert Brücker believes that net immigration to Germany could top 300,000 by the end of 2012 -- and that this is a good thing.

"Demographic change will hit us hard in 10 to 15 years," he says. "Before that happens, we need to have developed the potential of our labor force."

Still, Brücker doubts the current trend will continue. "We are in a unique situation right now," he says. "Almost all of Europe -- except for Germany -- is in crisis. But it won't stay like that."

Be it the United States or the European Union, most Western countries are so highly indebted today that the markets have a greater say in their policies than the people. Why are democratic countries so pathetic when it comes to managing their money sustainably?

In the midst of this confusing crisis, which has already lasted more than five years, former German Chancellor Helmut Schmidt addressed the question of who had "gotten almost the entire world into so much trouble." The longer the search for answers lasted, the more disconcerting the questions arising from the answers became. Is it possible that we are not experiencing a crisis, but rather a transformation of our economic system that feels like an unending crisis, and that waiting for it to end is hopeless? Is it possible that we are waiting for the world to conform to our worldview once again, but that it would be smarter to adjust our worldview to conform to the world? Is it possible that financial markets will never become servants of the markets for goods again? Is it possible that Western countries can no longer get rid of their debt, because democracies can't manage money? And is it possible that even Helmut Schmidt ought to be saying to himself: I too am responsible for getting the world into a fix?

The most romantic Hollywood movie about the financial crisis isn't "Wall Street" or "Margin Call," but the 1995 film "Die Hard: With a Vengeance." In the film, an officer with the East German intelligence agency, the Stasi, steals the gold reserves of the Western world from the basement of the Federal Reserve Bank of New York and supposedly sinks them into the Hudson River. Bruce Willis hunts down the culprit and rescues the 550,000 bars of gold, which, until the early 1970s, were essentially the foundation on which confidence in all the currencies of the Western world was built.

Creating Money out of Thin Air

Until 1971, gold was the benchmark of the US dollar, with one ounce of pure gold corresponding to $35, and the dollar was the fixed benchmark of all Western currencies. But when the United States began to need more and more dollars for the Vietnam War, and the global economy grew so quickly that using gold as a benchmark became a constraint, countries abandoned the system of fixed exchange rates. A new phase of the global economy began, and two processes were set in motion: the liberation of the financial markets from limited money supplies, which was mostly beneficial; and the liberation of countries from limited revenues, which was mostly detrimental. This money bubble continued to inflate for four decades, as central banks were able to create money out of thin air, banks were able to provide seemingly unlimited credit, and consumers and governments were able to go into debt without restraint.

This continued until the biggest credit bubble in history began to burst: first in the United States, because banks had bundled the mortgages of millions of Americans, whose only asset was a house bought on credit, into worthless securities; then around the globe, because banks had foisted these securities onto customers in many countries; and, finally, when these banks began to totter, debt-ridden countries turned private debt into public debt until they too began to totter, and could only borrow money from banks at even higher interest rates than before.

At the moment, the world has only one approach to getting out of this labyrinth of debt: incurring trillions of even more debt.

What does all of this have to do with Bruce Willis and Helmut Schmidt? Willis rescued the world's gold and, with it, the illusion of the good, old world. Schmidt, as Germany's finance minister in the 1970s, set the debt spiral in motion and fueled the illusion in Germany that countries could go into debt, and that this was good for everyone.

When Schmidt's predecessor, Karl Schiller, resigned from the government in protest over 4 billion deutsche marks in new debt, he said: "I am not willing to support a policy that creates the impression, to outsiders, that the government pursues the motto: After us comes the deluge."

Schmidt incurred 10 billion deutsche marks in new debt. Inspired by crisis economist John Maynard Keynes, the German government believed that economic stimulus programs would stimulate growth, but only under the condition that the debt was to be brought down again in better times.

This economic policy was known in Germany as "global regulation." As finance minister, and later as chancellor, Schmidt took advantage of the oil crisis to drive up the government deficit with economic stimulus programs. When Schmidt stepped down in 1982, annual government spending tripled in comparison to spending in 1970, reaching the equivalent of €126 billion ($161 billion), and the public debt increased fivefold, to €313 billion. By today, the combined debt of federal, state and local governments has climbed to more than €2 trillion.

A Human Debt Gene?

From today's perspective -- leaving aside all the effusive rhetoric about Europe -- the introduction of the euro is nothing but the continuation of debt mania with more audacious methods. The euro countries took advantage of the favorable interest rates offered by the common currency to get into even more debt.

Can all of this be blamed on some sort of human debt gene? Is it wastefulness, stupidity or an error in the system? There are two views on how the government should use its budgets to influence the economy: the theory of demand, established by Keynes, advocates creating debt-financed government demand, which in turn generates private demand and produces government revenues. In other words, building a road provides construction workers with wages. They pay taxes, and they also use their wages to buy furniture, which in turn provides furniture makers with income, and so on.

The other view, supply-side economics, is based on the assumption that economic growth is determined by the underlying conditions for companies, whose investment activity depends on high earnings, low wages and low taxes. According to this theory, the government encourages growth through lower tax rates. In the last few decades, the frequent transitions of power in Western countries between politicians who support supply-side economics (conservatives, libertarians and now some center-left social democrats) and those who advocate Keynesian economics (social democrats) has driven up government debt. When some politicians came into power, they reduced government revenues, and when they were replaced by those of the opposite persuasion, spending went up. Some did both.

When the debts of companies and private households are added to the public debt, the sum of all debt has grown at twice the rate of economic output since 1985, and it is now three times the size of the gross world product. The developed economies apparently need credit-financed demand to continue to grow, and they need consumers, companies and governments that go into debt and put off the financing of their demand until some time in the future. Of its own accord, this economic system produces the compulsion to drive up the debt of public and private households.

Governments delegate power and creative force to the markets, in the hope of reaping growth and employment, thereby expanding the financial latitude of policymakers. Government budgets that were built on debt continued to create the illusion of power, until the markets exerted their power through interest.

Interest spending is now the third-largest item in Germany's federal budget, and one in three German municipalities is no longer able to amortize its debt on its own steam. In the United States, the national debt has grown in the last four years from $10 trillion to more than $16 trillion, as more and more municipalities file for bankruptcy. In Greece, Spain and Italy, the bond markets now indirectly affect pensions, positions provided for in budgets and wages.

A country isn't a business, even though there are politicians who like to treat their voters as if they were employees. Politics is the art of mediating between the political and economic markets, convincing parliaments and citizens that economic policy promotes their prosperity and the common good, and convincing markets and investors that nations cannot be managed in as profit-oriented a way as companies.

After four years of financial crisis, this balance between democracy and the market has been destroyed. On the one hand, governments' massive intervention to rescue the banks and markets has only exacerbated the fundamental problem of legitimization that haunts governments in a democracy. The usual accusation is that the rich are protected while the poor are bled dry. Rarely has it been as roundly confirmed as during the first phase of the financial crisis, when homeowners deeply in debt lost the roof over their heads, while banks, which had gambled with their mortgages, remained in business thanks to taxpayer money.

In the second phase of the crisis, after countries were forced to borrow additional trillions to stabilize the financial markets, the governments' dependency on the financial markets grew to such an extent that the conflict between the market and democracy is now being fought in the open: on the streets of Athens and Madrid, on German TV talk shows, at summit meetings and in election campaigns. The floodlights of democracy are now directed at the financial markets, which are really nothing but a silent web of billions of transactions a day. Every twitch is analyzed, feared, cheered or condemned, and the actions of politicians are judged by whether they benefit or harm the markets.

The attempt by countries to bolster the faltering financial system has in fact increased their dependency on the financial markets to such an extent that their policies are now shaped by two sovereigns: the people and creditors. Creditors and investors demand debt reduction and the prospect of growth, while the people, who want work and prosperity, are noticing that their politicians are now paying more attention to creditors. The power of the street is no match for the power of interest. As a result, the financial crisis has turned into a crisis of democracy, one that can become much more existential than any financial crisis.

An Unequal BattleThe one sovereign stalks the other, while the pressure of the markets contends with the pressure of the street. In Europe, in particular, this has become an unequal battle. Since Jan. 14, 2009, when Standard & Poor's downgraded Greek government bonds, the markets have determined the direction and pace of European integration. They want bigger and bigger bailout funds, they want to safeguard their claims, they want a European Central Bank that buys up government bonds indefinitely, they want slashed government budgets, they want labor market reforms like the ones in Germany, they want wage cuts such as those in Germany and, at the same time, they want these incapacitated countries mired in recession to offer the prospect of healthy growth.

And this is happening in a Europe in which the sovereign nations don't truly know how much Europe they really want. The people who govern Europe don't know either, which puts them at the mercy of the markets. They have no common model for Europe, and they suspend the most basic democratic ground rules to remain capable of acting. They have to use tricks and bend agreements to prevent the euro from breaking apart.

The gulf between those who govern and those who are governed, a problem in any democracy, is complicated in Europe by the mistrust between Europeans and bodies that seek to tame the crisis in their name.

The actions of governments also generate mistrust. The German government, in particular, has more confidence in the markets than in the governments of Europe's crisis-ridden countries, and it finds the power of interest rates more convincing than promises of reform. Mistrust also stems from the relationship between governments and their voters, so much so that it's become common to delay important decisions until after elections and to keep them out of campaigns. There isn't much confidence in the economic judgment of the people. If lawmakers can hardly understand which bailout funds they are voting for, how many billions they are pushing in which direction, how great the risk of inflation is, what terms like target, derivative, leverage and securitization mean, how much can citizens be expected to comprehend? A citizen who hopes to understand the underlying problems of the euro crisis would, at the very least, have to read the business sections of major German newspapers like the Süddeutsche Zeitung or the Frankfurter Allgemeine Zeitung every day. Watching one talk show a week isn't enough.

Even Good Debt Needs to Be Serviced

The democratic decision-making process reaches its limits in this fundamental crisis, but even in the decades when debt was being accumulated, it was clear that democracies have a troubled relationship with money.

There was always justification for new debt. The catchphrases included things like more jobs, better education and social equality, and the next election was always around the corner. Debt was justified at the communal level to expand bus service or build playgrounds, at the state level to hire more teachers or build bypasses and, at the federal level, to buy tanks and fund economic stimulus programs.

There is good debt and bad debt, but even good debt needs to be serviced constantly. A closer look at which countries acquire and pay off debt, and to what degree, reveals unsettling correlations: The more often governments change and the more pluralistic they are, the faster the debt increases and the more difficult it becomes to pay if off. The more democracy, the looser the money. The only place money gets even looser is in dictatorships.

To hold an administration responsible for the debts of its predecessors, there are debt limits in democracies. In Helmut Schmidt's day, for example, there was a provision in the German constitution stipulating that total debt could not exceed total investment. In Europe, the provisions of the Maastricht Treaty, which is aimed at ensuring the stability of the common currency, limit the amount of debt a government can accumulate to no more than 60 percent of gross domestic product.

Debt Limits Have Never Worked

So far, such debt limits have never worked in any country. Under new laws in Germany, the federal government, starting in 2016, will only be allowed to incur new debt amounting to 0.35 percent of GDP. The euro countries have agreed to a similar rule, but it can only take effect if all national parliaments agree.

In some countries, there are already sparks of resistance against the limitation of new debt. The Italian government refuses to implement austerity measures demanded by the ECB and to approve a clause stipulating automatic spending cuts. After mass protests, the Portuguese government reversed cuts that had already been announced. Spain will fall short of an agreed deficit target of 6.3 percent, with its deficit actually predicted to come in at 7.4 percent. Euro-zone countries are in fact not allowed to incur new debt of more than 3 percent of GDP.

What makes those hoping to clean up budgets in the crisis-ridden countries skeptical is the downward spiral triggered by such drastic budget cuts, structural reforms and wage reductions. Private and public demand is sinking while the economy shrinks, leading to higher unemployment, less government revenue and higher debt. In Spain, after four austerity packages, the unemployment rate has increased from 8 percent in early 2007 to 25.8 percent today, while the country's debt ratio has doubled. In Portugal, unemployment has gone up by close to 100 percent in four years, with the debt ratio increasing from 72 to 114 percent. In Greece, after budget cuts amounting to more than 10 percent of the country's total economic output, unemployment has almost tripled and the debt ratio has risen from 113 to 160 percent.

These horrific numbers are not just driving people into the streets, but are also creating conflicts between politicians and economists. There it is again, the old dispute between the supporters of supply-side and Keynesian economics. Only when budgets have been balanced, taxes are low and wages are brought down can growth return, says the one side; those who cut public and private demand so radically are driving countries into recession and driving debts up instead of down, says the other. Average growth in Europe has declined continuously and was only 1.4 percent in 2011, while the economy is expected to shrink this year.

For many debt-ridden countries, growth is one of four possibilities to reduce debt. Balancing budgets through cuts and tax increases is another. The third option is a debt haircut, which means declaring bankruptcy and no longer servicing at least a portion of debts. The fourth path is inflation, that is, allowing the debt to melt away on the quiet at the expense of savers and consumers. But three to four percent inflation can hardly be justified politically in Germany, although the prospects are better in the United States and other countries. For this reason, and in response to German pressure, European countries are now trying out tough austerity programs.

A European Depression and a Pending Japanese DisasterBecause governments are in disagreement, bodies are taking their place that are turning into ersatz governments: the central banks.

The ECB's decision to buy up unlimited amounts of the sovereign debt of European countries is a replacement for political solutions for which there are currently no majorities in the governments and parliaments of euro-zone countries. The decision by the American Federal Reserve Bank to inject hundreds of billions of dollars into the markets again to stimulate economic growth results for the inability of Democrats and Republicans to agree on a compromise between limiting debt and economic stimulus programs. Printing money -- or betting hundreds of billions once again -- is the last desperate response on both sides of the Atlantic.

What began four years ago with the bursting of a credit bubble in the mortgage market is being combated with more and more new debt in the trillions, thereby inflating the next, even bigger credit bubble.

The fresh trillions circle the world in the search for yield, but only a small part of the money flows into the real economy, where investments in new production plants produce lower returns. Instead, the trillions slosh back and forth, from one financial market to another, from the foreign currency market to the commodities market, and from the gold market to the stock market and back again.

Because these trillions are not reaching the real economy, the risk of inflation is currently smaller than Germany's central bank, the Bundesbank, and its president would have us believe. But every saver and everyone with a life insurance policy pays for the central bank's low interest-rate policy with low interest rates. When central banks keep interest rates close to zero for long periods of time, which they have done for years, they disadvantage ordinary savers and favor major investors, gamblers and banks, which can borrow at low rates and invest the money elsewhere at a profit.

Blaming the Banks

Who and what has gotten the world into such trouble, and how can it extricate itself again? Not surprisingly, former Chancellor Schmidt blames investment bankers, the managers and bankers who flooded the world with worthless securities and long speculated on the sovereign debt of crisis-ridden countries, and who hedged their risks, which were much too high, with far too little capital and therefore had to be rescued with taxpayer money. Banks are still the focus of all problems in the financial markets. They still have to be supplied with money, and they still pose a threat to the system.

And those who allowed them to become so powerful are all those politicians and governments that gave the financial markets so much freedom, often socialized the risks, incurred too much government debt, and allowed the municipalities, states and countries to become so irresponsible. "The market" is not some group of experts, nor is it the last resort of collective reason. It is an orgy of irrationality, arbitrariness, waste and egoism. "Democracy" is not some event involving citizens, or some celebration of altruism and far-sightedness, but rather the attempt to bundle diverging interests into decisions in a way that's as peaceful as possible.

Together, the market and democracy are what we like to call "the system." The system has driven and enticed bankers and politicians to get the world into trouble, or least one could argue that if they too weren't part of the system. And we could sweep it away if we had a better one.

Instead, we are left with an undisguised view of the system. One of the side effects of the crisis is that all ideological shells have been incinerated. Truths about the rationality of markets and the symbiosis of market and democracy have gone up in flames.

The Problems of Modern Capitalism

The European depression is only prelude, with the Japanese disaster waiting in the wings. The country's debt-to-GDP ratio is 230 percent, and the government is dependent on the opposition approving the issue of new government bonds. Lurking behind it all is the American abyss, the debt drama of the next few months, the showdown and duel between Democrats and Republicans over which party can blame the other one for a national bankruptcy.

And then, finally, we have a clear view of the three biggest problems in finance-driven, democratically constituted capitalism: First, how can a debt-ridden economy grow if a large part of demand in the past was based on debt, which is now to be reduced?

The second major problem of modern capitalism is this: How can the unleashed financial markets be reined in again, and how should the G-20 countries come up with joint rules for major banks, which are their financiers and creditors, and for markets, which punish and reward these countries through interest? How much freedom do financial markets need to serve the global economy as a lubricant, and what limits do they need so that banks, shadow banks and hedge funds do not become a threat to the system?

Third, how do governments mediate between the power of the two sovereigns, how do they reestablish the primacy of citizens over creditors, and how does democracy function in debt-ridden countries? How can politicians react without burdening countries with more debt, and how can they reduce that debt? In fact, how can they even govern anymore in this prison of debt? In the past, future revenues were mortgaged, in municipalities, states and the federal government. This now makes it difficult to structure the present and the future. Today only about 20 percent of the federal budget is truly politically available, as compared with 40 percent when Schmidt was still in office.

It is always only at first glance that the world is stuck in a debt crisis, a financial crisis and a euro crisis. In fact, it is in the midst of a massive transformation process, a deep-seated change to our critical and debt-ridden system, which is suited to making us poor and destroying our prosperity, social security and democracy, and in the midst of an upheaval taking place behind the backs of those in charge.

A great bet is underway, a poker game with stakes in the trillions, between those who are buying time with central bank money and believe that they can continue as before, and the others, who are afraid of the biggest credit bubble in history and are searching for ways out of capitalism based on borrowed money.

France on Friday dashed the hopes of those who had planned to take refuge in one of the few places on Earth some believe will be spared when the world ends on December 21.

Local officials banned access to the Pic de Bugarach, a mountain in the southwest where rumour has it the hilltop will open on the last day and aliens will emerge with spaceships to save nearby humans.

Eric Freysselinard, the state’s top representative in the area, said he was blocking access to the mountain for public safety reasons to avoid a rush of New Age fanatics, sightseers and media crews.

Believers say the world will end on December 21, 2012, the end date of the ancient Mayan calendar, and they see Bugarach as one of a few sacred mountains sheltered from the cataclysm.

Freysselinard said the 100 police and firefighters he plans to deploy will also control approaches to the tiny village of the same name at the foot of the mountain, and if too many people turn up, they will block access there too.

“We are expecting a few visionaries, a few people who believe in this end of the world, but in extremely limited numbers,” he said in the nearby city of Carcassonne.

“We are expecting greater numbers of people who are just curious, but in numbers we cannot determine. Above all, we are expecting lots of journalists,” he said.

Films, documentaries and websites have promoted the idea that the ancient Mayan calendar predicts that doomsday is on December 21.

The culture ministry in Guatemala — where half the population are of Mayan descent — is hosting a massive event in the capital just in case the world actually does end, while tour groups are promoting doomsday-themed getaways.

But the country’s Maya alliance Oxlaljuj Ajpop accuses the government and tour groups of perpetuating the myth that their calendar foresees the imminent end of the world for monetary gain.

It issued a statement last month saying that the new Maya time cycle simply “means there will be big changes on the personal, family and community level, so that there is harmony and balance between mankind and nature.”

Forbidden City of Oil Platforms: The Rise and Fall of Stalin's Atlantis

By Arno Frank

In the 1950s, Soviet engineers built a massive city in the Caspian Sea off the coast of Azerbaijan. It was a network of oil platforms linked by hundreds of kilometers of roads and housing 5,000 workers, with a cinema, a park and apartment blocks. Gradually disintegrating but still closely guarded, this astonishing place inspired a fiery scene in a James Bond movie.

Bullets whip past James Bond as he sprints along the wooden quay. A sniper opens fire from a helicopter hovering above while 007, played by Pierce Brosnan, races through a labyrinth of pipes and bridges. Suddenly an explosion tears through this massive industrial plant run by the Russian mafia, a huge city in the Caspian Sea. Bond manages to leap into a vehicle conveniently equipped with a missile launch system and promptly shoots down the helicopter.

The backdrop of the floating city Bond battled his way out of in the 1999 movie "The World Is Not Enough" was built in Britain's Pinewood Studios -- but it was inspired by a very real location that counts as one the world's most astonishing cities: Neft Dashlari, far out in the Caspian Sea.

This area of Azerbaijan has been famed for its rich oil resources since ancient times. The "liquid fire" with which Constantinople drove the Arab besiegers from its walls in the seventh century consisted largely of oil that bubbled to the surface unaided along the coasts of the Black Sea and the Caspian. The Persians called the area the "Land of Fire," where priests lit their temples with oil from these natural sources.

The petrochemical industry didn't take off here until 1870 after Russia conquered the territory. In the years that followed, industrialists like Ludvig Nobel and the Rothschild brothers transformed the capital Baku into an oriental version of the French Mediterranean jewel of Nice. In 1941, Azerbaijan, then part of the Soviet Union, was already supplying 175 million barrels of crude oil a year -- 75 percent of the country's entire oil production. That's why German forces fought so hard to try to seize the city and the surrounding Absheron Peninsula. They failed.

A Monster of Steel and Timber

After the war, Soviet engineers took a closer look at a reef that mariners called the "Black Rock." They built a shed on the tiny island and conducted test drilling. During the night of Nov. 7, 1949, they struck top-quality oil at a depth of 1,100 meters below the seabed and shortly thereafter, the world's first offshore oil platform was built at the spot, now renamed Neft Dashlari, or "oily rock." "Platform" is a hopelessly inadequate word for the many-armed monster of steel and timber that gradually spread across the waves of the sea, which is only 20 meters deep on average, over the following years.

The foundation of the main settlement consists of seven sunken ships including "Zoroaster," the world's first oil tanker, built in Sweden. In Neft Dashlari's heyday, some 2,000 drilling platforms were spread in a 30-kilometer circle, joined by a network of bridge viaducts spanning 300 kilometers. Trucks thundered across the bridges and eight-story apartment blocks were built for the 5,000 workers who sometimes spent weeks on Neft Dashlari. The voyage back to the mainland could take anything between six and twelve hours, depending on the type of ship. The island had its own beverage factory, soccer pitch, library, bakery, laundry, 300-seat cinema, bathhouse, vegetable garden and even a tree-lined park for which the soil was brought from the mainland.

It was a Stalinist utopia for the working class. A Soviet stamp from 1971 summed up the gigantic hopes it embodied in a tiny image: against the black outline of a drilling rig, a road made of bridges snaked its way across the deep blue sea towards further rigs and a red sun on the horizon.

Waves Reclaiming the City

But there are few things as precarious as a world built on water and oil. The collapse of the Soviet Union ushered in the decline of this floating city as new oilfields were discovered elsewhere and the price of oil began to fluctuate. The workforce has halved to 2,500, and most of the rigs are now out of use or can't be reached because the bridges leading to them have collapsed. Of the 300 kilometers of roads, only 45 kilometers remain usable, and even they have fallen into disrepair. During a flood a few years ago, many apartments were submerged up to the second story.

A worker on Neft Dashlari still earns some $130 a month, twice as much as someone employed in the same job on the mainland. But the plant hasn't been operating efficiently for years. Submerged steel constructions pose a threat to shipping, oil leaks abound and equipment is falling apart.

Dismantling Neft Dashlari properly would probably be more expensive than simply keeping it going with a scaled-down oil production. To the government, the place is still the proud, closely-guarded secret it was in Soviet times. It is still very hard for foreigners to gain access to the city, which isn't even shown on Google Maps.

There were plans to refurbish Neft Dashlari and even to transform it into a tropical luxury holiday resort, but nothing has come of them. Today, it accounts for only a fraction of Azerbaijan's oil production. Experts estimate that the oil deposits underneath the city will only last for another 20 years. In a few decades, rusting steel jutting out of the waves and old seacharts will be all that remain of this gigantic labyrinth in the sea.

This article originally appeared in German on einestages, SPIEGEL ONLINE's history portal.

WASHINGTON — President Barack Obama and Congressional leaders vowed Friday to make difficult compromises on taxes and spending as they opened talks on dodging a looming fiscal cliff and trimming the US deficit.

With only weeks to avoid steep automatic budget cuts and tax hikes that could send the country back into recession, the leaders said they were seeking to map out a deal on long-term deficit reduction that included both higher revenues and lower spending.

Obama opened the talks, 10 days after his re-election victory, saying Americans “want to see that we are focused on them, not on the politics here in Washington.”

“Our challenge is to make sure that we’re able to cooperate together, work together, find some common ground, make some tough compromises, build some consensus to do the people’s business.”

Obama’s Republican opposite John Boehner, speaker of the House of Representatives, emerged from the initial session saying they had laid a framework for a deal that represented “a fair and balanced approach.”

“To show our seriousness, we’ve put revenue on the table. As long as it’s accompanied by significant spending cuts.”

Harry Reid, Democratic leader of the Senate, said the group was committed to reaching agreement after many months of deadlock.

“There is no more, ‘let’s do it some other time,’” he said. “This isn’t something we’re going to wait until the last day of December to get it done.”

The group, which also included Senate Republican chief Mitch McConnell, and Nancy Pelosi, the leader of the minority Democrats in the House, was under pressure from the public and the markets to strike a deal that averts the immediate threat of a year-end crunch.

The cliff involves a series of steep across-the-board budget cuts and effective tax increases from expiring temporary cuts slated to hit on January 1 that could suck more than $500 billion out of the economy.

Both sides generally support extending the tax cuts, though Obama strongly insisted on Wednesday that he wanted taxes to go up for the richest two percent of Americans, which Boehner has rejected.

But there was no mention of that issue as the two sides entered the White House for the initial meeting.

Obama only stressed the need to protect middle class Americans.

“We have to make sure that taxes don’t go up on middle class families and that our economy remains strong and creating jobs, and that’s an agenda that Democrats and Republicans and Independents, people all across the country share,” he said.

Afterwards, Obama’s spokesman said the group had “agreed to do everything possible to find a solution” to avoid the cliff.

But doing so appeared closely linked to agreeing the broad lines of a deal on slashing the long-term deficit, an issue which has locked up policy-making in Washington for two years.

Even if the fiscal cliff is avoided, the government still will be confronted with a massive debt load of $16.2 trillion and a deficit that has topped $1 trillion a year for four years running.

Debt rating agencies like Standard & Poor’s and Moody’s have warned that the US faces a possible downgrade this year if it does not get the deficit under control.

Until now the two parties have been split over how to correct the deficit: Republicans have insisted on spending cuts while Democrats say the focus needs to be more on raising revenues from taxes.

But in recent days the two sides have said they are willing to negotiate both tax revenue increases and paring back expenditures.

Boehner and Obama both proposed to shake up the tax system to eliminate loopholes and deductions, and Obama has signaled that he is ready to engage Republicans on the sensitive issue of “entitlement” spending on social programs like Social Security and Medicare.

“We understand that it has to be about cuts. It has to be about revenue,” said Pelosi.

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November 16, 2012

At Bipartisan Budget Meeting, Familiar Hurdles but a New Attitude

By JACKIE CALMES and JONATHAN WEISMANNYT

WASHINGTON — President Obama and Congressional leaders on Friday reopened budget negotiations that ended badly in 2011 with surprising bipartisan bonhomie, and even some initial agreements toward a year-end deal. Yet a familiar hurdle remains before any handshakes: resolving the parties’ dispute over whether to extend the Bush-era tax rates for the wealthy.

Both sides indicated after the 70-minute White House meeting that their goal is a two-step compromise, since they have little time to work before the end of the year. That is when more than $500 billion in automatic tax increases and across-the-board spending cuts hit all Americans, and potentially shake the economy, unless Congress enacts an alternative deficit reduction agreement.

As tentatively envisioned, a compromise would provide an immediate down payment of at least $50 billion to reduce this year’s projected deficit, in lieu of the automatic measures that would hurt the economy by their size and suddenness, economists say. Second, it would define a framework for negotiating a long-term “grand bargain” in 2013 to shave annual deficits by perhaps $4 trillion over the first decade.

The framework would have separate goals for raising revenues and cutting the two types of federal spending: so-called discretionary financing that Congress sets annually for most programs, domestic and military; and entitlement spending, chiefly for Medicare and Medicaid, which by their growth in an aging population are driving projections of mounting debt.

The agreement to aim for a framework only in the initial talks is a quick step forward. Some lawmakers, including the Senate Republican leader, Mitch McConnell of Kentucky, had wanted a larger deal before Jan. 1 as the price for shutting off the automatic deficit reduction that would hit then. Representative Nancy Pelosi of California, the House Democratic leader, went so far as to predict that a deal to head off that so-called fiscal cliff would be at hand “well before Christmas.”

While such a two-pronged deal would put off the hardest and most far-reaching policy decisions until next year, no deal is possible unless the negotiators first decide on the deficit down payment. That installment, it is widely believed, must be large enough to satisfy financial markets, which oppose the automatic measures as too large and threatening but still want Washington to show some resolve toward getting the nation’s fiscal house in order.

Mr. Obama, Vice President Joseph R. Biden Jr. and the Democrats — Harry Reid of Nevada, the Senate majority leader, and Ms. Pelosi — made it clear around the negotiating table that the down payment is easily made by letting the Bush tax cuts expire, as scheduled on Dec. 31, for annual income of $250,000 and above for couples and $200,000 for individuals. The Bush rates would be extended for lower incomes, preserving them for 98 percent of taxpayers.

The Republicans — House Speaker John A. Boehner and Mr. McConnell — were just as plain that, while they support raising additional revenues by curbing deductions and through economic growth, they would oppose an increase in marginal tax rates. They want the down payment in spending cuts.

Yet after an election campaign in which Mr. Obama made this a top issue, Republicans have reduced leverage, many acknowledge. That shift in the Washington fiscal dynamic since Mr. Obama’s re-election also explains the rapidity with which the Republican leaders have agreed that higher revenues will be part of the deficit-reduction solution — if not through higher rates.

If the president has his way, the top rates, now 33 percent and 35 percent, would rise to 36 percent and 39.6 percent, the Clinton-era levels, on Jan. 1. But Mr. Obama has suggested he is open to a compromise that would set the rates somewhere in between, in combination with limits on deductions.

With Mr. Obama leaving on Saturday for a four-day diplomatic trip to Asia and Thanksgiving looming, the negotiators directed their staffs to flush out the Republican bottom line on the size and type of savings to get from Medicare and Medicaid in preparation for the leaders’ next meeting in the week after the holiday.

Republicans were heartened that Mr. Obama designated his soon-to-retire Treasury secretary, Timothy F. Geithner, as his lead negotiator, instead of the White House chief of staff, Jacob J. Lew. Mr. Boehner’s relations with Mr. Lew soured during the prolonged and bitter budget talks in 2011.

The four Congressional leaders emerged from the West Wing round table together and in good spirits — a far cry from the 2011 negotiations, when they generally left separately and, once back at the Capitol, circulated competing versions of the private discussions. Mr. Reid virtually promised a deal before a Dec. 31 deadline that would avoid the last-minute brinkmanship so typical of Congress’s budget debates in recent years.

“We feel very comfortable with each other, and this isn’t something we’re going to wait until the last day of December to get it done,” Mr. Reid said. “We have the cornerstones of being able to work something out. We’re both going to have to give up some of the things that we know are a problem.”

Mr. Boehner said he outlined a framework for overhauling the tax code and spending programs that is “consistent with the president’s call for a fair and balanced approach.”

“To show our seriousness,” he said, “we put revenue on the table as long as it’s accompanied by significant spending cuts.”

Mr. McConnell made plain that Republicans were talking about Medicare and Medicaid spending. Republican senators, he said, “fully understand that you can’t save the country until you have entitlement programs that fit the demographics of the changing America in the coming years.”

“We’re prepared to put revenues on the table,” he said, “provided we fix the real problem, even though most of my members, I think without exception, believe that we’re in the dilemma we’re in not because we tax too little but because we spend too much.”

Ms. Pelosi, whose colleagues include many liberals who resist significant changes to entitlement spending, said: “We understand our responsibility here. We understand that it has to be about cuts, it has to be about revenue, it has to be about growth, it has to be about the future.”

She added, “I feel confident that a solution may be in sight.”

The talks also began on a friendly note: With reporters and cameras briefly allowed in the room, Mr. Obama wished a happy birthday to Mr. Boehner, who turns 63 on Saturday. The president gave the speaker, who favors merlot, a bottle of 1997 brunello wine, a pricey Italian red.

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Republican governors cede health exchanges to the federal government

By Eric W. DolanFriday, November 16, 2012 18:45 EST

Several Republican governors have announced they will not implement a state-run health care exchange, ceding control to the federal government.

The health care exchanges, a key component of Obamacare, are meant to help individuals and small businesses by providing them with an online market to compare and purchase private health insurance plans. The exchanges are required to be fully operational by January 1, 2014.

States can opt to build their own health care exchange, enter into a state-federal partnership, or allow the federal government to establish the exchange.

Republican governors in Alaska, Alabama, Ohio, South Dakota, Maine, Nebraska, Missouri, Kansas, Louisiana, Texas, Georgia, Wisconsin and South Carolina have all said they will not run their own health care exchanges, turning over control to the Obama administration.

The GOP governors said that state-run health care exchanges lacked flexibility and would be too costly for the state to implement. Many of the governors argued there were so many federal regulations on state-run health care exchanges that it would practically be a federal program anyway.

“Regardless of who runs an exchange, the end product is the same,” Ohio Gov. John Kasich said Friday in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius.

Kasich was echoed by Wisconsin Gov. Scott Walker, who on Friday told Sebelius in a letter, “No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents.”

The states were required to decide by Friday whether they would run their own insurance exchanges, but the Obama administration extended that deadline until December 14.

Seventeen states and the District of Columbia have decided to implement a state-run exchange, while Arkansas, Illinois, Delaware, North Carolina and Michigan have opted for a state-federal partnership.

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November 16, 2012

States Decline to Set Up Exchanges for Insurance

By ROBERT PEAR and ABBY GOODNOUGHNYT

WASHINGTON — Georgia, Ohio and Wisconsin joined more than a dozen other states on Friday in saying they would not establish health insurance exchanges, while a handful of other states said they would take advantage of an extra month allowed by the Obama administration to make decisions.

The exchanges — online markets where consumers can shop for private insurance subsidized by the federal government — are a centerpiece of President Obama’s health care law.

The administration has been urging states to set up exchanges, as Congress intended. The federal government will create and run exchanges in any state that is unable or unwilling to do so.

Mr. Obama and his health secretary, Kathleen Sebelius, have promised to give states flexibility in carrying out the new health care law and running the exchanges. However, Republican governors said they had not been allowed much latitude to date.

Gov. John R. Kasich of Ohio, a Republican, said Friday that his state “will not run an Obamacare health exchange, but will instead leave that to the federal government to do.”

“Based on the information we have,” Mr. Kasich said, “states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens.”

Gov. Scott Walker of Wisconsin, another Republican opposed to the health care law, said, “From a philosophical standpoint, I prefer state-run over federal on any day on any subject.” But under the law, Mr. Walker said, “Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents.”

For decades, under governors of both parties, Wisconsin has been a national leader in the regulation of insurance.

Caroline F. Pearson, who tracks state developments at Avalere Health, a consulting company in Washington, said it appeared that about 18 states would choose to run their own exchanges, while 10 to 12 would seek partnerships with the federal government, and 18 to 20 would have federal exchanges.

Friday was to be the deadline for states to declare their intentions. But Ms. Sebelius said Thursday night that she was extending the deadline to Dec. 14. In any event, she must decide by Jan. 1 whether states are able to run their own exchanges.

Americans are supposed to be able to start shopping for insurance through exchanges in October 2013. By January 2014, most Americans will be required to have health insurance under the law.

Obama administration officials said they would be ready to run the federal exchanges, but they have not provided any information about their plans or their progress.

Gov. Rick Scott of Florida, a Republican, asked Friday for a meeting with Ms. Sebelius to discuss plans for an exchange. He said he was still analyzing his options, but had not seen evidence that an exchange would lower health costs for Floridians.

Gov. Nathan Deal of Georgia, a Republican, said his state would not establish an exchange. He expressed concern about what he described as “the one-size-fits-all approach and high federal burden imposed on states.”

Other Republican governors, including Jan Brewer of Arizona, C. L. Otter of Idaho, Terry E. Branstad of Iowa, Chris Christie of New Jersey, Tom Corbett of Pennsylvania and Bill Haslam of Tennessee, said they would use the extra time to seek more answers from Washington and feedback from constituents.

In a letter to Ms. Sebelius, Mr. Branstad said his state wanted to create its own exchange, but needed much more information. He included a list of 50 questions and said that unless they were answered, Iowa might have no choice but to opt for a federal exchange.

Many of the questions were about the costs of building and running an exchange. Mr. Otter said he would consult leaders of the Idaho Legislature and make a decision by the new deadline. An advisory committee appointed by Mr. Otter recommended last month that Idaho create its own exchange. But, Mr. Otter said, “I don’t want us buying a pig in a poke.”

Gov. Bev Perdue of North Carolina, a Democrat, said her state intended to join the federal government in establishing a hybrid form of exchange. Ms. Perdue will soon be succeeded by Pat McCrory, a Republican, who will decide what role the state should play.

Heather H. Howard, a lecturer at Princeton University who provides technical help to states as director of the State Health Reform Assistance Network, said the guidance provided by the Obama administration was sufficient for states to make decisions. States like California, Maryland and Washington have made great strides in developing exchanges, she said.

Ms. Howard said that governors might try to use the extra time to negotiate. “They’re feeling their oats and testing the limits of what leverage they have,” she said.

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Petraeus tells Congress that Susan Rice was unaware of al-Qaida ties to Benghazi

By Ewen MacAskill, The GuardianFriday, November 16, 2012 19:53 EST

David Petraeus, the former CIA director, told congressional hearings on Friday that he had always known a terrorist group had been involved in an attack in Benghazi that left the US ambassador and three other Americans dead.

According to reports from members of Congress who attended the closed-door hearings, Petraeus said the information had been included in the original set of talking points prepared by the CIA for the Obama administration. But he said it was removed from the one provided to the UN ambassador, Susan Rice, who used it as the basis for a series of interviews on the weekend after the killings.

Rice is among the contenders to replace Hillary Clinton as US secretary of state. In a press conference this week, Barack Obama, angrily criticised two Republican senators, John McCain and Lindsey Graham, who threatened to block her nomination if the president put her name forward.

Petraeus, who gave evidence to both the Senate and House intelligence committees, said that references to the group alleged to have been behind the 11 September attack were in the CIA’s classified talking points, which were classified, but removed from the unclassified memo relied upon by Rice. The reason, he said, was not to tip off the group about what the US authorities knew.

Briefing reporters later, Republicans and Democrats on the committees put different glosses on the evidence given by Petraeus, who resigned a week ago over an extramarital affair.

Peter King, the Republican chairman of the House intelligence committee, said he was not satisfied with Petraeus’s explanation of the talking points. King said: “It is still not clear how the final talking points emerged. He said it went through a long process involving many agencies including the Justice Department and including the State Department.

“No one knows yet who came up with final version of the talking points other than to say the original talking points prepared by CIA were different from the ones that were finally put out.”

Dianne Feinstein, the Democratic chairwoman of the Senate intelligence committee, accused McCain and Graham of unfairly targeting Rice. Feinstein, who did not refer to the senators by name, accused them of trying to “assassinate her character”.

She added: “The key is they [the talking points] were unclassified talking points at a very early stage. And I don’t think she should be pilloried for this. She did what I would have done or anyone else would have done who was going on a weekend show.”

A Democratic member of the House, Adam Schiff, said: “The general was adamant there was no politicisation of the process, no White House interference or political agenda. He completely debunked that idea.”

Petraeus had been scheduled to give evidence on Thursday but after that hearing was dropped after he resigned due to revelations of an affair with his biographer, Paul Broadwell. Some Republicans hinted he had resigned not because of the affair but to avoid giving evidence. Under pressure, he agreed to testify, and the hearings were rescheduled for Friday.

To avoid the embarrassment of facing a media scrum, Petraeus was smuggled in and out of Congress. He made only a passing reference to the affair that brought him down, mentioning it only to express regret and to say it had not influenced earlier testimony about Benghazi.

A Libyan-based group, Ansar al-Shariah, which the US describes as having loose links with al-Qaida sympathisers in north Africa, is being blamed for the Benghazi attack, which killed the US ambassador, Chris Stevens. Republicans have been relentlessly pursuing the issue for almost two months, suggesting that the Obama administration deliberately played down the al-Qaida link for political reasons.

Having claimed that al-Qaida had been largely defeated, the Obama administration did not want to admit that a group with possible al-Qaida links had been behind the killings on the 9/11 anniversary, according to Republicans.

Rice, in her interviews, had suggested the attacks were largely motivated by a spontaneous demonstration by protesters against a US-produced anti-Muslim film and she put less emphasis on the attack being organised by extremists.

During the hearings, Petraeus – who has once been touted as a possible Republican candidate – appears to have undercut GOP arguments, saying the aftermath of Benghazi had not been a political issue and that there had been no attempt by the White House to distort the talking points in advance of Rice’s appearance before the media.

Democratic members of Congress had until now largely stayed out of the row about Rice. But they came out strongly in support of her for the first time on Friday, possibly as the result of some behind-the-scenes prodding from the White House.

Three months after the Obama administration started a program that gives temporary reprieves from deportation to young immigrants here illegally, nearly 309,000 of them have applied and 53,273 have received deferrals, according to figures the Department of Homeland Security released on Friday.

The number of approvals increased from 4,591 one month ago, signaling a rapid acceleration in a program that both Democrats and Republicans — including Mitt Romney — have credited with bolstering President Obama’s standing among Latinos, earning him decisive votes for his electoral victories in at least four swing states.

The program, which began receiving applications Aug. 15, did not attract much news coverage during the presidential campaign, but it had a far-reaching effect in Latino and other immigrant communities. Young people continued to come forward to apply despite uncertainty created by Mr. Romney, who said he would stop issuing reprieves if he was elected.

Under the program, young immigrants in the United States illegally who came to the country as children can receive two-year deportation deferrals and work permits.

According to the department’s figures, more than 273,000 immigrants are in the final stages of the approval process. To date, 10,101 applications were rejected before they were evaluated because they were incomplete.

Homeland Security officials did not say how many applications were denied. Republicans in Congress warn that the agency in charge, United States Citizenship and Immigration Services, could be rushing to approve reprieves without performing thorough background checks.

But immigration lawyers, who have been wary of the risks the program could pose for young immigrants who have long lived without legal papers, said they had been favorably surprised by its progress.

“The application process has been a model of government efficiency,” said Don Lyster, a director in Washington of the National Immigration Law Center, an advocacy group for immigrants. Mr. Lyster said the numbers should reassure young immigrants “that the government is invested in ensuring the success of this program.”

California, Texas and New York were the top states where applicants lived. The fourth was Florida, where Mr. Obama eked out a victory based largely on Latino votes.

With the campaign over, immigration officials said they might face a new surge in applications from young people who had been waiting to see if Mr. Obama won re-election.

Mr. Obama said this week that he wanted to take up a comprehensive immigration bill soon after his inauguration, which would include a permanent path to citizenship for young immigrants who are eligible for the temporary reprieves.

In a post-mortem conference call with Republican donors on Wednesday, Mr. Romney cited the program as one of the “gifts” that he said Mr. Obama gave to his supporters. For Hispanics, Mr. Romney said, “The amnesty for children of illegals, the so-called Dream Act kids, was a huge plus for that voting group.”

The deferrals do not provide any pardon or legal status. Senator Marco Rubio, Republican of Florida, said Thursday that he thought Congress could move quickly to enact a version of the Dream Act, a bill tailored to give legal status to young immigrants.

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November 16, 2012

Drug Shortages Persist in U.S., Harming Care

By KATIE THOMASNYT

Paul Davis, the chief of a rural ambulance squad in southern Ohio, was down to his last vial of morphine earlier this fall when a woman with a broken leg needed a ride to the hospital.

The trip was 30 minutes, and the patient was in pain. But because of a nationwide shortage, his morphine supply had dwindled from four doses to just one, presenting Mr. Davis with a stark quandary. Should he treat the woman, who was clearly suffering? Or should he save it for a patient who might need it more?

In the end, he opted not to give her the morphine, a decision that haunts him still. “I just feel like I’m not doing my job,” said Mr. Davis, who is chief of the rescue squad in Vernon, Ohio. He has since refilled his supply. “I shouldn’t have to make those kinds of decisions.”

From rural ambulance squads to prestigious hospitals, health care workers are struggling to keep vital medicines in stock because of a drug shortage crisis that is proving to be stubbornly difficult to fix. Rationing is just one example of the extraordinary lengths being taken to address the shortage, which health care workers say has ceased to be a temporary emergency and is now a fact of life. In desperation, they are resorting to treating patients with less effective alternative medicines and using expired drugs. The Cleveland Clinic has hired a pharmacist whose only job is to track down hard-to-find drugs.

Caused largely by an array of manufacturing problems, the shortage has prompted Congressional hearings, a presidential order and pledges by generic drug makers to communicate better with federal regulators.

The problem peaked in 2011, when a record 251 drugs were declared in short supply. This year, slightly more than 100 were placed on the list, and workers say the battle to keep pharmacy shelves stocked continues unabated. The list of hard-to-find medicines ranges from basic drugs like the heart medicine nitroglycerin to a lidocaine injection, which is used to numb tissue before surgery.

A deadly meningitis outbreak caused by contamination at a large drug producer could worsen the situation, federal officials have warned. The Food and Drug Administration said that shortages of six drugs — medicines used during surgery and to treat conditions like congestive heart failure — could get worse after a big compounding pharmacy closed over concerns about drug safety. The pharmacy, Ameridose, shares some management with the New England Compounding Center, which is at the center of a meningitis outbreak that has claimed 33 lives.

“When you can’t treat basic things — cardiac arrest, pain management, seizures — you’re in trouble,” said Dr. Carol Cunningham, the state medical director for the Ohio Department of Public Safety’s emergency services division. “When you only have five tools in your toolbox and three of them are gone, what do you do?”

Dr. Margaret A. Hamburg, the F.D.A. commissioner, said in an interview this week that she was “guardedly optimistic” that the shortage crisis was abating. “I think there’s been an enormous amount of progress,” she said. “We’re seeing real change in the number of shortages that we’re able to recognize early.” More than 150 new shortages have been prevented this year, according to the agency.

But Erin Fox, who tracks supply levels for a broader range of drugs at the University of Utah, said once a drug became scarce, it tended to stay scarce. The university’s Drug Information Service was actively tracking 282 hard-to-find products by the end of the third quarter of this year, a record.

“The shortages we have aren’t going away — they’re not resolving,” she said. “But the good news is we’re not piling more shortages on top.”

In 2011, prompted by emotional pleas by cancer patients and others who said the drug shortage was threatening lives, President Obama issued an executive order requiring drug makers to notify the F.D.A. when a shortage appeared imminent. The agency also loosened some restrictions on importing drugs, and sped up approvals by other manufacturers to make certain medicines.

A law passed this summer contains several provisions aimed at improving the situation, including expediting approval of new generic medicines and requiring the agency’s enforcement unit to better coordinate with its drug-shortage officials before it takes action against a manufacturer.

Ralph G. Neas, the chief executive of the Generic Pharmaceutical Association, said fixing the drug shortage was complex and would take time, but was a top priority. “One shortage is one shortage too many,” he said. “One patient not getting a critical drug is one patient too many.”

Federal drug officials trace much of the drug shortage crisis to delays at plants that make sterile injectable drugs, which account for about 80 percent of the scarce medicines. Nearly a third of the industry’s manufacturing capacity is not running because of plant closings or shutdowns to fix serious quality issues. Other shortages have been caused by supply disruptions of the raw ingredients used to make the drugs, or by manufacturers exiting the market.

Some people have accused the F.D.A. of causing the shortages, saying overzealous enforcement and poor communication have led plants to close needlessly or to slow production. Others have cited economic factors, like market pressures and reimbursement policies that have set prices so low that some companies have stopped making certain drugs. Earlier this week, several Democratic members of Congress asked the Government Accountability Office to investigate whether the practices of so-called group purchasing organizations, which buy drugs on behalf of hospitals, was contributing to the shortage.

Regardless of the cause, the drug shortage has forced the F.D.A. to make some tough choices, including allowing manufacturers to sell drugs that, if it were not for the crisis, most likely would have been recalled. Last year, for example, the agency allowed the manufacturer American Regent to sell a drug used during chemotherapy that was found to contain glass particles. Doctors and nurses were instructed to filter the drug, sodium thiosulfate, before administering it to patients.

“If there wasn’t a shortage, we would never allow a company to continue marketing” in such cases, Dr. Sandra Kweder, deputy director of the F.D.A.’s office of new drugs, said. But “patients need it.”

Dr. Hamburg said drug manufacturers had invested significantly in improving their facilities, upgrades that will ultimately help ease the crisis but that in the near term are making some shortages difficult to resolve. “It’s not going to happen overnight, but we’re in the midst of a period of really, very significant change that offers great promise for the future,” she said.

Patients like Jennifer Lacognata, a mother of two in suburban Florida, say they cannot afford to wait. She has debilitating night blindness, skin lesions and other health problems because she cannot absorb vitamin A through her diet, a rare side effect of weight-loss surgery she had years ago. In 2011, her doctor prescribed Aquasol A, a liquid form of the vitamin, to be injected into her shoulder.

But Hospira has temporarily stopped selling Aquasol A after it decided to move manufacturing of the product from an outside company to one of its plants. The company recently decided to abort the plan, citing complex technical challenges, and now has a deal with another company to begin making the vitamin.

Ms. Lacognata sued Hospira unsuccessfully to try to compel the company to make it again.

A company spokeswoman said Hospira recognized the critical need for Aquasol A and was “working diligently” to return it to the market, but declined to provide an estimate of when.

Given that the delays have stretched for more than a year, Ms. Lacognata said she was not holding her breath. “If they don’t get their act together and do this, they’re not going to suffer,” she said. “They’re still going to be making millions of dollars. It’s the little guy in the end who ends up with nothing.”

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November 16, 2012

Amid the Ashes, a Statue of Mary Stands as a Symbol of Survival

By SAMUEL G. FREEDMANNYT

Where the McNulty home once stood on the corner of Oceanside and Gotham, a few blocks from the Atlantic Ocean on the spit of land in Queens called Breezy Point, there now remains a charred, twisted ruin. Flooding and fire have left behind nothing but the foundation. Within it are strewed a dislodged bathtub, an air-conditioner casing battered into a helix shape, a mailbox coated with ashes.

As if all that loss were not loss enough, the storm spared a few tormenting reminders of life before its arrival. In the scorched shell of a cedar closet, screen windows stand neatly stacked. Three rolls of paper towels sit on a pantry shelf, toasted as delicately brown as cookout marshmallows.

So, yes, at the corner of Oceanside Avenue and Gotham Walk, the house inherited by the elderly McNultys’ niece Regina after the couple died, is a place of tragedy. It is also, astonishingly, a place of faith. For the one part of the home to survive intact was a statue of the Virgin Mary that Mary McNulty placed in her garden years ago.

The statue is one of the only recognizable remnants of the swath of Breezy Point where more than 100 homes burned to the ground while a flood kept firefighters from reaching it. Since the waters withdrew early on Oct. 30, the image of the Breezy Point Madonna has reached the nation, indeed the world, through vivid news photos. Pilgrims have come to leave offerings: a bouquet of yellow roses, four quarters, a votive candle, a memorial card for the victims of Sept. 11, a written admonition that healing begins with acceptance.

Ellen Mathis Kail knelt at the shrine five days after the catastrophe. She had spent 30 summers on Breezy Point and watched her parents save for decades to buy a bungalow on Gotham Walk. She had been married in the parish church, St. Thomas More, a few blocks away.

Living in Denver, teaching fourth grade at Saint Vincent de Paul, a Roman Catholic school, Ms. Kail had followed the grim news of the storm’s approach. On Oct. 29, when she saw a message on Facebook that said “Breezy Point burning,” she sent a text message to her childhood friend, Meg Dolan.

“Please, Meg,” she wrote, “before I tell my parents, is there any chance this could be a very bad rumor?”

Ms. Dolan sent a text back, “It’s all devastation.”

The next morning, the teachers and students at Saint Vincent de Paul began writing cards. Ms. Kail flew to New York with a bag full of them on Nov. 2. Initially, she said, she had thought of having Ms. Dolan or one of the parish priests give them to displaced families. But then, walking through the wreckage along Gotham, she noticed the statue and laid the cards at Mary’s feet.

“I am a kid from Denver,” one boy wrote, “and my teacher is Ellen. I love her accent, it’s funny. But I’m so sorry for your homes. But God will make something good out of it and God will protect you Big and Small. You Rock!”

Ms. Kail noticed a pot of violets outside another destroyed house. Somehow the flowers were still alive. She moved the pot beside the Madonna.

“It was so bleak, so horrific,” Ms. Kail, 44, said. “And I thought maybe if I left some color, some hope, it would brighten someone’s day, just to think someone is praying for them.”

One of the first photographers on the scene, Frank Franklin II of The Associated Press, reached the corner of Oceanside and Gotham at 6 a.m. on Oct. 30.

Winding through the fields of blackened debris, he found himself transfixed by the statue of the Virgin Mary. Though raised by Protestant parents, Mr. Franklin attended a Catholic high school and he immediately perceived a deeper meaning.

“It’s weird how I was drawn to it,” Mr. Franklin, 40, recalled. “I’m not the most religious person in the world, but I know what those images are. When I made that frame, I knew it would resonate with people. What I couldn’t imagine was how much.”

Through his Twitter account, Mr. Franklin has heard from people who saw his photo in print or online. “A wonderful image,” one wrote on Twitter. Another wrote, “A symbol of faith.” By the afternoon of Nov. 16, a Google search for “Breezy Point Madonna” retrieved more than 400,000 results.

What happened spontaneously speaks to a larger theme in Catholicism. According to Timothy Matovina, a theology professor at the University of Notre Dame, the veneration of Mary, or Marian devotion, tends to fall into three categories. One involves apparitions; the second concerns statues associated with miracles in response to prayer; the third, as at Breezy Point, centers on an image of Mary that survives in some extraordinary way.

“In the midst of terrible tragedy, here’s a holy image, a sacred image, that made it through,” Dr. Matovina said. “There’s a sense you’ve been crushed, but not abandoned.”

Last week, Msgr. Michael J. Curran, the pastor of St. Thomas More, stood before the statue. A retired firefighter standing nearby surveying the remains of his home, greeted the monsignor, then nearly broke into tears.

“It will be a symbol of the suffering,” Monsignor Curran said of the statue, “but also of our rise from the ashes. It will be a symbol of what we’ve been through but also of our resurrection. It will be a reminder that for all the property we lost, God never left.”

GAZA CITY — Israel pressed its assault on the Gaza Strip for a fifth straight day on Sunday, deploying warplanes and naval vessels to pummel the coastal enclave and striking at two media offices here as Prime Minister Benjamin Netanyahu warned of a possible “significant” expansion in the onslaught.

His words came as militants in Gaza aimed at least one rocket at the Israeli heartland in Tel Aviv, one day after after Israeli forces broadened the attack beyond military targets, bombing centers of government infrastructure including the four-story headquarters of the Hamas prime minister.

“We are exacting a heavy price from Hamas and the terrorist organizations and the Israel Defense Forces are prepared for a significant expansion of the operation,” Mr. Netanyahu told his cabinet at its routine Sunday meeting, referring directly to the call-up of thousands of reservists that, coupled with a massing of armor on the Gaza border, many analysts have interpreted as preparations for a possible invasion.

“I appreciate the rapid and impressive mobilization of the reservists who have come from all over the country and turned out for the mission at hand,” he said. “Reservist and conscript soldiers are ready for any order they might receive.”

Mr. Netanyahu’s remarks were reported shortly after a battery of Israel’s “Iron Dome” defense shield, hastily deployed near Tel Aviv on Saturday in response to the threat of longer-range rockets, intercepted at least one projectile aimed at the city on Sunday, Israeli officials said. The episode was the latest of several salvoes that have illustrated Hamas’s ability to extend the reach of its rocket attacks.

Since Wednesday, when the latest escalation of the conflict began, Iron Dome has knocked 245 rockets out of the sky, the military said on Saturday, while 500 have struck Israel.

The American-financed system is designed to intercept only rockets streaking toward towns and cities and to ignore those likely to strike open ground. But on Sunday a rocket fired from Gaza ploughed through the roof of an apartment building in the southern Israeli city of Ashkelon. There were no immediate reports of casualties there.

In Gaza City, the crash of explosions pierced the quiet several times throughout the early morning.

Hamas health officials said the Palestinian death toll rose to 53 by early Sunday afternoon, the latest victim a 52-year-old woman whose house in the eastern part of Gaza City was bombed around lunchtime.

A few hours earlier, a Hamas militant was killed and seven people were wounded in an attack on the Beach Refugee Camp, where Ismail Haniyeh, the Hamas prime minister, has a home. Those killed on Sunday included 3 children aged between one and 5, the health officials said.

In Israel, 3 civilians have died and 63 have been injured. Four soldiers were also wounded on Saturday.

The onslaught continued despite talks in Cairo that Egyptian President Mohamed Morsi said Saturday night he thought could soon result in a ceasefire. Prime Minister Netanyahu said he would consider a comprehensive ceasefire if the launches from Gaza stop.

Saturday’s attack on Mr. Haniyeh’s office, one of several on government installations, came a day after he hosted his Egyptian counterpart in the same building, a sign of Hamas’s new legitimacy in a radically redrawn Arab world.

That stature was underscored Saturday by a visit to Gaza from the Tunisian foreign minister and the rapid convergence in Cairo of two Hamas allies, the prime minister of Turkey and the crown prince of Qatar, for talks with the Egyptian president and the chairman of Hamas on a possible cease-fire.

As the diplomacy intensifies, a delegation of Arab ministers plans to visit Gaza on Tuesday, Reuters reported, while Ban Ki-moon, the United Nations Secretary General, is expected in Cairo on Monday.

But Mark Regev, a spokesman for Mr. Netanyahu, denied reports on Saturday that a truce was imminent.

It was unclear whether the deal under discussion in Cairo would solely suspend the fighting or include other issues. Hamas — which won elections in Gaza in 2006 and took full control in 2007 but is considered a terrorist organization by Israel and the United States — wants to turn its Rafah crossing with Egypt into a free-trade zone and seeks Israel’s withdrawal from the 1,000-foot buffer it patrols on Gaza’s northern and eastern borders.

Mr. Netanyahu also spoke with the leaders of Britain, Germany, Italy, Greece, Poland, Portugal, Bulgaria and the Czech Republic, according to a statement from his office. On Sunday, he said he appreciated the “understanding they are displaying for Israel’s right to defend itself.”

But some European leaders seemed to be counseling restraint as much as offering support.

As French media reported that the French foreign minister, Laurent Fabius, was heading for Israel to seek a ceasefire, William Hague, his British counterpart, cautioned that an Israeli invasion of Gaza “would lose Israel a lot of the international support and sympathy they have” and make it “much more difficult to restrict and avoid civilian casualties.”

The conflict, meanwhile, showed no sign of abating.

Palestinian news agencies reported that two children were killed in a predawn strike on Sunday in Beit Lahiya in northern Gaza. The Israeli military said it had “targeted dozens of underground launchers” overnight and also hit what it called a Hamas training base and command center. The Israeli Navy “targeted terror sites on the northern Gaza shore line,” the statement said, in repeated rounds of multiple missiles that could be easily heard.

Among the buildings Israel hit overnight were two containing the offices of local media outlets.

Salama Marouf of the Hamas media office condemned what he called an “immoral massacre against the media” and calling the attack a “confession” by Israel “that it has lost the media battle.”

Seven journalists were injured in the first attack, around 1:40 a.m., in the Shawa and Hossari Building in downtown Gaza City, which houses two local radio stations -- one run by the militant Islamic Jihad -- and the offices of the Ma’an Palestinian news agency as well as the German broadcaster ARD.

One of the journalists injured on Sunday, Khader Zahar of the Beirut-based Al Quds satellite channel, lost a leg in the explosion, which hit its 11th-floor studio.

The Israeli military referred to the two sites as “Hamas operational communication sites that were identified by precise intelligence.” In the first site, “in order to minimize the damage to non-involved persons, the I.D.F.only targeted the communication devices which were located on the roof of the building, and not the operations room of Hamas that is located on one of the floors.”

“The second site was targeted at approximately 06:50 a.m. and was also part of Hamas’ operational communications that was deliberately located on the roof of the building, in which several international media bureaus reside,” the military said in a statement.

It urged “international journalists and correspondents who operate in the Gaza Strip carrying out their duties, to stay clear of Hamas’ bases and facilities —which serve them in their activity against the citizens of Israel.”

Ayman Amar, a spokesman for Al Quds television, said seven camera operators and editors were resting on couches in their 11th-floor offices around 1:30 a.m. Sunday when a missile fired from an Israeli helicopter ripped through the roof. They fled, and three more bombs dropped around 10 minutes later, Mr. Amar said.

Al Quds, an independent channel with 50 employees in the Gaza Strip, has had offices in the building since 2007, and on its top floor since 2011. Since the conflict escalated Wednesday morning, journalists have been working around the clock and catching naps in the office. Some of those who were not injured were back out on the streets Sunday, Mr. Amar said, while others tried to clear the wreckage from the five-room editing studio.

“We never expected that it would hit us,” he added. “So far we don’t know why; there are no reasons. We will not stop. It is our duty towards our cause to support the Palestinian people.”

Later, a missile dropped from an Apache helicopter hit the top of the 15-story Al Shoruq Building, also downtown, witnesses said.

The target was the Hamas channel that broadcasts locally, Al Aqsa, but the building also contains offices of the Al Arabiya television network and the Middle East Broadcast Center which runs it, as well as the live studio position of the Iranian television station, and two production companies -- Gaza Media Center and Mayadeen -- that provide services for Fox News, Sky News, CBS and Al Jazeera.

Nobody was injured in that attack. Witnesses said that everyone in the building fled after a warning missile was fired in the stairwell, two minutes before the attack on the roof.

The Foreign Press Association in Jerusalem said it was “concerned” by the attacks, recalling a United Nations ruling that “journalists, media professionals and associated personnel engaged in dangerous professional missions in areas of armed conflict shall be considered civilians, to be respected and protected as such.”

The ability to gain access to and influence media coverage is critical to both sides seeking to promote their rival claims and versions of the events and arguments underpinning the conflict, recalling the 2008-2009 winter invasion of Gaza that brought international condemnation of Israel.

The media war took a new turn on Sunday when the Israeli military intercepted and took over the signals from two local radio stations -- Al Aqsa, which is affiliated with Hamas, and Islamic Jihad’s Al Quds -- to broadcast a warning message to Gaza residents: “We recommend that you stay away from the places of terrorists and the infrastructure of Hamas.”

It continued: “Hamas is playing with fire and putting you at risk.”

Israel’s foreign ministry said on Saturday that 22 foreign journalists were prevented by Hamas from leaving the Gaza Strip.

The White House reiterated its strong support for Israel. Benjamin J. Rhodes, the deputy national security adviser, described rocket fire from Gaza as “the precipitating factor for the conflict.”

“We believe Israel has a right to defend itself, and they’ll make their own decisions about the tactics that they use in that regard,” Mr. Rhodes told reporters on Air Force One en route to Asia.

Jodi Rudoren reported from Gaza City, Isabel Kershner from Jerusalem and Alan Cowell from London. Reporting was contributed by Fares Akram and Tyler Hicks from the Gaza Strip, Carol Sutherland and Iritz Pazner Garshowitz from Jerusalem, and David D. Kirkpatrick and Mayy El Sheikh from Cairo.

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November 18, 2012

Israel ready to 'significantly expand' Gaza operation: PM

AFP - Prime Minister Benjamin Netanyahu said on Sunday that Israel is ready to "significantly expand" its operation against militants in the Hamas-run Gaza Strip as it entered its fifth day.

"We are extracting a heavy price from Hamas and the terror organisations," Netanyahu said at the start of the weekly cabinet meeting. "The army is prepared to significantly expand the operation."

Netanyahu said he was holding ongoing talks with world leaders, "and we appreciate their understanding of Israel's right to self defence."

"The operation in the Gaza Strip is continuing, and we are preparing to expand it," he said.

His remarks came as thousands of Israeli troops backed by armour massed along the border, fuelling fears that the Jewish state is poised to expand its relentless aerial bombing campaign into a ground operation.

Netanyahu praised the "swift and impressive" response of reservists, 16,000 of whom have already been called up for duty in emergency orders.

"The soldiers are ready for any activity that could take place," he said at the cabinet meeting.

The Israeli army sealed off the main roads around Gaza late on Friday and shortly afterwards, the cabinet authorised the recruitment of up to 75,000 reservists, prompting a flurry of diplomatic efforts to broker a truce to head off any escalation.

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November 17, 2012

Arms With a Long Reach Help Hamas

By ETHAN BRONNERIHT

TEL AVIV — When Israel assassinated the top Hamas military commander in Gaza on Wednesday, setting off the current round of fierce fighting, it was aiming not just at a Palestinian leader but at a supply line of rockets from Iran that have for the first time given Hamas the ability to strike as far as Tel Aviv and Jerusalem.

The commander, Ahmed al-Jabari, had shifted Hamas’s low-grade militia into a disciplined force with sophisticated weapons like Fajr-5 rockets, which are named after the Persian word for dawn and have significantly increased the danger to Israel’s major cities. They have a range of about 45 miles and are fired by trained crews from underground launching pads.

Hamas had perhaps 100 of them until the Israeli attacks last week, which appear to have destroyed most of the stockpile. The rockets are assembled locally after being shipped from Iran to Sudan, trucked across the desert through Egypt, broken down into parts and moved through Sinai tunnels into Gaza, according to senior Israeli security officials.

The smuggling route involves salaried employees from Hamas along the way, Iranian technical experts traveling on forged passports and government approval in Sudan, Israeli officials said.

Mr. Jabari’s strategy has been so effective and alarming for Israel that it is preparing for a possible next stage in the four-day-old battle: a ground war in which its troops would seek to destroy remaining rocket launching bases and crews and munitions factories.

Under Mr. Jabari, Hamas also developed its own weapons industry in Gaza, building long-range rockets as well as drones that they hoped to fly over Israel just as Israeli drones roam the skies of Gaza, sowing fear in its population.

The current operation to eliminate the Hamas rocket launchers could serve to cripple the ability of Iran’s allies in Gaza from retaliating should Israel ever carry out its threat to attack Iranian nuclear facilities.

“Both Hamas and Islamic Jihad are building weapons with experts from Iran,” one top security official said Saturday, speaking on condition of anonymity. “What we took care of last night was their own production facility for U.A.V.’s,” he added, referring to unmanned aerial vehicles, or drones. “This was all the work of Jabari, who was a very sophisticated and strategic thinker.”

A number of recent Israeli military attacks were aimed at cutting the supply chain into Gaza. In late October, a munitions factory in Sudan was hit from the air. Israel did not acknowledge carrying out the attack, but the winks and nods of officials here make clear that it did. Israel has carried out several other such attacks on Sudan, including on convoys, in the past few years.

In addition, Mossad agents killed a Hamas official in a Dubai hotel in early 2010 because he was thought to be crucial to the Hamas supply chain of weapons and rockets into Gaza.

One official here said that until Israel ended its military occupation of Gaza in 2005, there were only primitive weapons factories there. The Hamas rockets had a flight capacity of about a mile, they could not be aimed and they flew in a wild cylindrical pattern. Hamas then built better rockets that could fly up to 12 miles.

That changed little until 2007, when Hamas fighters pushed the Fatah-dominated Palestinian Authority out of Gaza into the West Bank and took over governing the coastal strip.

“At that point, Jabari turned his neighborhood defense operation into a real army,” said a retired Israeli general whose portfolio included Gaza and who spoke on condition of anonymity. “He organized what was a militia into companies, battalions and brigades. He sent commanders to Syria and to Iran to be trained by the Revolutionary Guards. And then he built up this whole new branch to develop military technology focusing on long-range missiles.”

The collapse of the government of Col. Muammar el-Qaddafi in Libya last year created other supply options for Hamas as Libyan military storehouses were raided and the equipment sold off. Those weapons were driven across Egypt and into Gaza.

It remains to be seen whether Mr. Jabari’s death will truly cripple Hamas, or whether it will find someone equally adept to take his place, the officials said.

Either way, Hamas now has a range of rockets and weapons in its arsenal, said Jeffrey White, a former analyst with the United States Defense Intelligence Agency and now a fellow at the Washington Institute for Near East Policy.

In addition to the Fajr-5, Hamas has a few hundred of what are known as enhanced Grad rockets, which have a range of about 25 miles. The Grads are 122-millimeter rockets that have bigger warheads than the standard Grads, but their accuracy is relatively low. The Grads may also be coming from Iran, Mr. White said, but others are made in Gaza and imported from Libya.

In addition, Hamas has hundreds of standard Grads that have a range of about 12 miles, as well as thousands of homemade mortars and Qassam rockets with a range of about six miles.

Israeli officials said the movement of the Fajr-5 rockets through Egypt could not go unnoticed there, given their size. Each is 20 feet long and weighs more than 2,000 pounds — the warhead alone weighs 375 pounds — and the trucks carrying them across Egyptian bridges and through roadblocks into Sinai would be hard to miss.

In the current conflict, Israel’s antirocket system, known as Iron Dome, has been more effective than expected, but still dozens of rockets have landed.

Whether the military operation against Gaza is a dress rehearsal for any future attack on either Iran or Lebanon — where Hezbollah has thousands of rockets pointed at Israel — is a matter under debate here. Some see it as clearing away any possible trouble from Gaza. Others say that makes little sense, given the difference of scale in the conflict in Gaza and any war against Iran or Hezbollah. Hamas’s arsenal is tiny compared with what Hezbollah in Lebanon is thought to have: thousands of rockets capable of hitting Tel Aviv.

Yonatan Touval, an analyst with Prime Source, a private Tel Aviv risk-assessment company, said, “The Iron Dome system is ineffective in intercepting longer-range projectiles, such as those that would be launched from Lebanon toward the Tel Aviv area. To address this threat, Israel is currently developing the Magic Wand system, but it is not expected to become operational before 2015.”

He added that the fighting now was therefore not really a test of a future conflict involving Iran and Lebanon. “If Israel’s political leadership is treating the current operation in Gaza as something of a rehearsal for a future war with Hezbollah and Iran, it is rehearsing the wrong play,” he said.

Michael R. Gordon contributed reporting from Washington.

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18 November 2012 - 12H23

Two rockets intercepted as Hamas targets Tel Aviv

AFP - Sirens sounded across Tel Aviv for a fourth straight day on Sunday, AFP correspondents said, as Israeli police confirmed two rockets had been intercepted over the city by the Iron Dome defence system.

"Two rockets were intercepted by the Iron Dome system," police spokesman Luba Samri told AFP shortly after the sirens sent residents running for cover across the commercial metropolis and in nearby Bnei Brak and Ramat HaSharon.

The Israeli army confirmed the interception, but said that only one rocket had been fired from Gaza.

The sirens sparked panic, bringing traffic to an abrupt halt as pedestrians and drivers ran to find shelter, an AFP correspondent said.

Immediately beforehand, another correspondent in Gaza City reported hearing the loud report of an outgoing rocket, with Hamas militants from the Ezzedine al-Qassam Brigades claiming they had fired an Iranian-built Fajr 5 rocket at Tel Aviv.

The group later said it had fired a second rocket at the city of Herzliya, just north of Tel Aviv, but there were no reports of an alert there.

Shortly after the interception, a car just south of Tel Aviv caught fire, apparently as a result of falling debris from the rocket, Samri said.

"A car caught fire in Holon, apparently as a result of shrapnel falling when the rocket was intercepted by Iron Dome," she told AFP.

In a separate development, two people were lightly wounded when a rocket scored a direct hit on a building in the southern coastal town of Ashkelon, the Magen David Adom emergency services said.

Since Thursday there have been five alerts in the greater Tel Aviv area, warning residents to seek shelter immediately because of an incoming rocket from Gaza in what Israeli networks said were the first such attacks on the city since the 1991 Gulf War.

Seven rockets have been fired towards Tel Aviv in that period, with three hitting the sea, three intercepted by Iron Dome and another slamming into open ground near the southern city of Rishon LeTzion on Thursday.

On Friday, air raid sirens also sounded in Jerusalem, sparking panic among residents shortly after the start of Shabbat, with police and the army confirming that a rocket had struck just outside the city, in the West Bank.

Sunday's incident comes as Israel presses a relentless air campaign in Gaza, with militants firing more than 700 rockets over the border.

The attacks targeting Israel's two biggest cities marked the farthest that rockets fired from Gaza have ever reached inside the Jewish state.

Iranian-made Fajr 5 rockets have a range of up to 75 kilometres (46 miles).

On Thursday, Hamas said it had developed its own longer-range rocket, the M75, which was used to target Jerusalem.

*************

Tel Aviv shaken but not stirred by Gaza rockets

By Agence France-PresseSaturday, November 17, 2012 11:50 EST

Elad and his girlfriend Hadas check to see if the latest hip Tel Aviv establishment has a proper shelter in case of a sudden air siren — and only then look at the menu before deciding on a restaurant.

“It is the (1991) Gulf War all over again except that these rockets are no longer called SCUDS,” said 20-something Elad as he walked hand-in-hand with Hadas along the city’s bustling Mediterranean seafront.

“But the people refuse to admit it,” Hadas chipped in. “People like sipping their coffees at outdoor cafes and really do not want to change their lifestyles. It is a slow process in Tel Aviv, this change.”

Israel’s city that never sleeps is a playground whose party spirit was first shattered two decades ago during the first US campaign in Iraq.

But this week, militants from Gaza, who are locked in a deadly struggle with the Israeli military, fired two rockets at the city, both of which landed in the sea.

Neither caused any casualties, but they made a big splash, especially the one which fell in the water just 200 metres (yards) from the US embassy, sparking panic among beach-goers.

Gaza militants have long claimed to have missiles capable of reaching Tel Aviv, but until now, they have never put them into use.

The short-range rockets that have been falling by the hundreds on southern Israel can easily be assembled in Gaza — a territory ruled by Hamas but which is also home to other, even more militant Islamist branches.

But rockets that can fly more than 50 kilometres (30 miles) are widely believed to have been produced in Iran, although Hamas on Friday claimed to have developed one with a 75-kilometre range (45 miles) which was fired at Tel Aviv.

How all these political consideration play out on the streets of Tel Aviv will help in large part to decide the fate of Israel’s upcoming elections on January 22 and that of its rightwing government headed by Prime Minister Benjamin Netanyahu.

Jerusalem also came under fire from Gaza militants for the first time ever on Friday, with one rocket landing just outside the city.

Several hours later, the defence ministry said it would station a fifth battery of its Iron Dome anti-missile system in the metropolitan Tel Aviv area, which press reports said would counter rockets fired at both cities.

It was expected to be operational by Saturday night.

The mood at this stage wavers between a furious refusal to believe that anything has changed, and calls for Netanyahu to order in troops and tanks into Gaza as soon as possible.

“I was not scared at all,” said a car park attendant called Dana Alosh.

“What does it matter to me? If the rocket gets us — well, it gets us. But in the mean time, we sing and dance just like before.”

But her friend — a burly native Russian who looks after a small convenience store across the street — grumbled “kill all the Arabs” before walking away with a shake of the head.

Even 47-year-old Flora had a few words of militant encouragement for Netanyahu as she leisurely walked her dog while hiding behind huge chic sunglasses.

“It is okay by me if we go in (to Gaza) now,” said Flora with a vigorous nod.

“There is no longer an alternative — we have to live and talk and walk and things like this.”

Several people did admit surprise at Tel Aviv suddenly falling within the militants’ range. But few wanted to openly express shock or fear — the mood instead being almost mournful over a city stripped of its innocence.

“Everyone we know says that they have been looking to see where their bomb shelters are,” said Elad as his girlfriend broke into a laugh.

“That is what they say,” Hadas explained.

“It is the cool thing to do — to say that I hid in a bomb shelter. But I do not think that people really do that. It will be a while before they become really afraid.”

Elad listened to Hadas and paused. “There is a certain anxiety in the air,” he concluded. “Let us just call it that.”

*************

18 November 2012 - 11H49

UK says Gaza invasion would lose Israel foreign support.

AFP - A ground invasion of the Gaza Strip would lose Israel much international sympathy and support, British Foreign Secretary William Hague warned Sunday.

Hague told Sky News television it was much more difficult to limit civilian casualties in a ground assault and it would threaten to prolong the conflict.

"A ground invasion of Gaza would lose Israel a lot of the international support and sympathy that they have in this situation," Hague said.

The eruptions in the Middle East have posed perhaps the severest, most direct test yet of the limits of President Obama’s signature foreign policy innovation during his first term, what the White House hails as the “light footprint” strategy.

Sensitive to public sentiment that a decade of war had debilitated America, and eager to focus on economic problems at home, President Obama quickly embraced a mix of remote-control technology and at-a-distance diplomacy to contain the most explosive problems in the Middle East, South Asia and Africa. Strikes by unmanned drone aircraft increased sixfold, secret cyberweapons were aimed at Iran, and special forces killed the world’s most-wanted terrorist and made night raids the currency of American force.

For a while it worked. As Mr. Obama’s newly fallen director of central intelligence, David H. Petraeus, asked so succinctly a year ago, “Who wouldn’t want a light-footprint strategy?”

But implicit in Mr. Petraeus’s arch question was the recognition that the strategy has limited utility. And now Mr. Obama is under more pressure than ever to become engaged in the Middle East in a way that he avoided during the presidential campaign. In his own party, there are rumblings that he should intervene more directly to halt the slaughter in Syria — by placing Patriot missiles around the region to take down President Bashar al-Assad’s air power — and to renew efforts in the Israeli-Palestinian peace process as soon as the current missile barrages can be contained.

Overarching all those problems is the question of Iran, which has fueled the Syrian conflict in part to show that it will not sit idly while sanctions eat away at its oil revenue. Mr. Obama has already declared that he wants to start direct negotiations with Iran — but it is a last-ditch effort, his own aides acknowledge, to avert a military confrontation that they fear could come by the middle of 2013.

Mr. Obama had hoped not to be preoccupied with these crises in the last weeks of his first term. The hope four years ago was that by now he would be reaping the peace dividends of extracting America from Iraq and withdrawing from Afghanistan, even if the mission was far from complete, so he could turn to what during the campaign he frequently characterized as “some nation-building at home.”

Since 2009, Mr. Obama has tried to avoid getting sucked into the vortex of Middle Eastern conflict and dysfunction that drained so many of his predecessors. It was a deliberate choice from the start, his aides say. Fresh to the presidency, he asked his national security staff to reassess where America was overinvested and underinvested around the world.

The answer, his national security adviser, Thomas E. Donilon, recalled last week, came back quickly: “We were overweighted in some regions, such as our military commitments in the Middle East,” and underweighted in regions where America’s future prosperity lay, notably elsewhere in Asia.

That helps explain why Mr. Obama is moving ahead this weekend with a trip to Thailand, Myanmar and Cambodia rather than burying himself in the Situation Room in a running conference call with Prime Minister Benjamin Netanyahu of Israel and President Mohamed Morsi of Egypt, whom Mr. Obama is leaning on to contain the militant Palestinian party Hamas and stop the predictable escalation of missile attacks.

“We never considered scrapping the trip,” one of Mr. Obama’s top aides said on Friday. “It’s the difference between keeping focused on what’s important in the long term and the urgent crisis du jour, which will always be there.”

To Mr. Obama’s critics, the root of the seeming absence of American leverage in the Middle East today is a light footprint that was simply too light.

“I think the way to understand Obama’s approach — I wouldn’t call it a strategy — is that he has a uniform preference to keep most problems at a distance,” said Eliot A. Cohen, a professor at the Johns Hopkins School of Advanced International Studies who worked for Mitt Romney’s presidential campaign and helped develop Mr. Romney’s critique of Mr. Obama’s approach. “That is what the light footprint has been all about. And it’s run out of gas.”

Libya has become Exhibit 1 in that argument. Mr. Obama reluctantly committed air power to the ouster of Col. Muammar el-Qaddafi over the objections of the secretary of defense at the time, Robert M. Gates, who warned that there was no direct American interest in the outcome. Instead, the president urged the Arab League and NATO to “put skin in the game.”

They did, but Mr. Obama’s reluctance to put American forces on the ground during the fight, and his decision to keep America’s diplomatic and C.I.A. presence minimal in post-Qaddafi Libya, may have helped lead the United States to miss signals and get caught unaware in the attack on the American mission in Benghazi. Military forces were too far from Libya’s shores during the Sept. 11 attack to intervene.

At the end of the current investigations, that fact, more than any other, seems most likely to emerge as the answer to the question of why so little firepower was available to protect the ambassador and other Americans after they came under attack.

Syria has already become the next argument over the utility of the light footprint. Mr. Obama long resisted getting involved in that conflict even from the air, as he did in Libya. The international community was too disorganized; there was no NATO or Arab League effort; and the Russians and the Chinese blocked effective action at the United Nations.

Also, with the election looming, Mr. Obama had no interest in immersing America in a new war just as he was exiting two others. “We’re not going to do a damn thing until the election is over,” one of his senior diplomats fumed in the summer.

But with about 40,000 dead as a result of the conflict in Syria, the pressure on Mr. Obama is building, even from some Democrats. A proposal is circulating to put Patriot missile batteries in Turkey and Jordan, capable of shooting down Mr. Assad’s airplanes as they attack rebel strongholds.

“It’s not a fair fight,” Senator Mark Udall, a Colorado Democrat, said on Saturday at the Halifax International Security Forum in Nova Scotia. “The election is over, and while I’m not endorsing a no-fly zone today, we can’t stand idly by” and risk having the rest of the region inflamed.

Senator John McCain of Arizona, who ran against Mr. Obama in 2008 and has been among the most vocal advocates of greater intervention, argues that “every bad thing that we predicted would happen if we intervened — instability in Jordan, Lebanon and Turkey — is already happening anyway.”

There seems to be no chance of an American ground intervention; even Mr. McCain, the Senate’s strongest hawk, stops short of advocating that. But Mr. Obama’s own aides acknowledge that his hope that he could hold back and let those with more direct interests take the lead has been dashed. The light footprint of the future may not be so light.

AFP - President Barack Obama arrives in Asia on Sunday to intensify a US foreign policy pivot towards the fast-rising region on his first overseas trip since re-election, including a landmark visit to Myanmar.

He will be the first sitting US president to set foot in the long-time pariah, reflecting a dramatic thaw in relations brought about by sweeping political changes under a new reformist government.

Obama, who has dubbed himself America's first "Pacific president", will first touch down in Thailand, then make a one-day stop in Myanmar on Monday, before joining regional leaders in Cambodia for the East Asia Summit.

He is making his fifth visit to Asia since taking office in 2009 and his second this year, a period otherwise consumed by heavy duty campaigning ahead of his poll triumph on November 6.

Obama's first stop in Thailand is meant to signal that Washington is committed to a strong set of alliances in a region pre-occupied by the geo-political implications of a rising China.

"Allies are the cornerstone of our rebalancing effort in Asia," said Ben Rhodes, a US deputy national security advisor, as Obama flew to Bangkok aboard Air Force One.

"Thailand is actually the oldest treaty ally of the United States, an ally since 1954 and a key partner in Southeast Asia."

Soon after touching down, Obama will have an audience with Thailand's revered King Bhumibol Adulyadej who has been in ill health, then hold talks and a news conference with Prime Minister Yingluck Shinawatra.

Obama plans to discuss US cooperation with Thailand, counter narcotics issues, terrorism, trade and trafficking, and will inaugurate a programme to connect US and Thai universities.

On Monday, Obama will fly to neighbouring Myanmar on a trip that would have been unthinkable just a year ago, but which has been opened up by the dramatic reform drive spearheaded by President Thein Sein.

Obama will hold talks with the former general, then travel to the lakeside residence of Aung San Suu Kyi, where his fellow Nobel peace laureate was held for long years of house arrest.

Suu Kyi has now entered parliament after her rivals in the junta relaxed their iron fists and made way for a nominally civilian government, albeit in a system still stacked heavily in favour of the military.

Some human rights groups said that Obama should have waited longer to visit, arguing that he could have dangled the prospect of a trip as leverage to seek more progress such as the release of scores of remaining political prisoners.

But officials say that Obama will encourage the regime to double down on more reform, and that his influence could be important at a crucial moment in Myanmar's emergence from decades of isolation and repression.

The United States on Friday scrapped a nearly decade-old ban on most imports from the country, after earlier lifting other sanctions.

Myanmar meanwhile last week pardoned hundreds more prisoners, but activists slammed the move, apparently involving mostly common criminals and not dissidents, as a ploy to curry favour before Obama's visit.

Ahead of the visit, Rhodes said Myanmar had made "positive" steps towards weaning itself from a military relationship with North Korea, and dangled the carrot of future military exercises with US and Thai forces if the reform effort is sustained.

Thein Sein has denied that Myanmar has such relations with North Korea, but sectors of the country's powerful military are believed to be resistant to cutting all ties with the Stalinist pariah state.

The trip will be somewhat overshadowed by a wave of violence in Myanmar's western Rakhine state between Buddhists and minority Rohingya Muslims, which the Organisation of Islamic Cooperation Saturday branded as "genocide".

Obama will also be the first sitting US president to visit Cambodia late on Monday for talks with Prime Minister Hun Sen, ahead of the East Asia summit.

But Rhodes said that the White House had "grave concerns" over Cambodia's record on human rights, and that Obama would not be visiting were it not for the fact that the East Asia Summit is being held there.

Cambodia has been a staunch supporter of China and was seen as scuttling an initiative on resolving Asian maritime disputes when Secretary of State Hillary Clinton visited for regional talks in July.

On the summit's sidelines, Obama will meet China's outgoing premier, Wen Jiabao, and Prime Minister Yoshihiko Noda of Japan, whose relations with Beijing have frayed because of rival territorial claims.

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November 17, 2012

Obama’s Road to Myanmar Is Paved With New Asia Intentions

By PETER BAKER and JANE PERLEZNYT

WASHINGTON — On the stump this fall, President Obama boasted that he had “brought more trade cases against China” than his predecessor had. In an ad, he asserted that his challenger “never stood up to China.” During a debate, Mr. Obama said he expanded trade with other Asian nations “so that China starts feeling more pressure” to play by the rules.

The contest with Mitt Romney is over, but the contest with China is only gathering steam. After a political campaign spent talking about how tough he was with Beijing, the newly re-elected president departed for Asia on Saturday for his first postelection overseas trip, a whirlwind swing through China’s backyard that is fraught with geopolitical implications.

Mr. Obama will make a historic visit to Myanmar to mark the emergence of the long-isolated country and encourage its migration from China’s orbit toward a more democratic future with the West. He will also stop in Thailand, America’s longtime ally in the region as well as a friend of China’s. And he will fly to Cambodia for a summit meeting of a Southeast Asian organization as the United States tries to increase its influence in that part of the region.

With the election over, the White House has softened its language, and presents the trip not as an explicit attempt to contain China but as the next stage of its so-called pivot to Asia, reorienting American foreign policy after a decade of wars in Iraq and Afghanistan toward the economic and political future of the Pacific. On the cusp of a second term, Mr. Obama sees such a shift as a mission for the next four years and a possible legacy.

“The president’s trip marks the beginning of the next phase of our rebalancing effort,” Thomas E. Donilon, the president’s national security adviser, said in a speech at the Center for Strategic and International Studies in Washington. “When the president says the United States will play a larger and long-term role in the region, we intend to execute on that commitment.”

But when the Obama team talks about “rebalancing,” Mr. Donilon said it meant “both toward the Asia-Pacific and within the Asia-Pacific,” meaning more engagement with nations like Myanmar, Thailand and Cambodia. As for China, he said, the relationship “has elements of both cooperation and competition.”

The political centerpiece of the trip is the scheduled six-hour visit to Myanmar, which is considered strategic in the reorientation to Asia not only because of its location bordering China, but because its leaders have signaled their pique with China’s relentless search for natural resources and their willingness to tilt toward the West as a way of counterbalancing their imposing neighbor.

Although the trip to Yangon was scheduled to coincide with the Asian summit meeting, the symbolism of Mr. Obama’s visit — the first by a sitting United States president — has not been lost on China, a longtime patron.

In Beijing, where Xi Jinping has just been installed as the new leader in a once-in-a-decade transition, the trip is seen as part of a continuing challenge to China’s rise. The government interprets America’s attention on the region, including the deployment of more troops and battleships, as an effort to encircle China.

“The pivot is a very stupid choice,” said Jin Canrong, a professor at the School of International Studies at Renmin University in Beijing. “The United States has achieved nothing and only annoyed China. China can’t be contained.”

On China’s periphery, where its rapid military modernization and territorial claims in resource-rich seas are viewed with nervousness, Mr. Obama’s pivot is mostly welcomed. Many in the region, however, worry about whether the United States has the money and will to follow through. There is also a question over how much impact the United States can have, no matter its commitment. China has the edge in trade; every country in the region except the Philippines does more business with China than with the United States.

“That’s happened over the last five years, faster than expected,” said Peter Drysdale, head of the East Asian Bureau of Economic Research at the Australian National University. “The disparity of the scale of what’s going on with China and the region compared to the United States will grow.”

Mr. Obama’s trip follows visits to the region in recent days by Secretary of State Hillary Rodham Clinton and Defense Secretary Leon E. Panetta. The president stops in Bangkok on Sunday before heading to Myanmar.

In Yangon, Mr. Obama will meet with President Thein Sein, a former general who has led Myanmar’s opening, releasing many political prisoners and freeing the long-persecuted opposition to run for seats in Parliament. The president will also meet with Daw Aung San Suu Kyi, the Nobel laureate who emerged from years of house arrest to win one of those seats.

But while Mr. Obama wraps himself in the evolving success story — the United States bet that it was worth easing sanctions early on as an encouragement to reformers — some human rights activists deemed the visit a premature vanity exercise. They pointed to the continued detention of some political prisoners, a recent sectarian conflict they believe the government has done too little to stop and the Myanmar military’s war with ethnic rebels.

Among those who initially urged against the trip, activists in the United States said, was Ms. Aung San Suu Kyi.

“It rewards Burma for things they’ve already been rewarded for, and it wastes enormous political capital which could have been saved up and used to reward future events,” said John Sifton, Asia advocacy director for Human Rights Watch, who added that Mr. Obama should now leverage the trip by insisting on tangible action like the release of remaining political prisoners.

Mr. Donilon said the trip would help “lock in this path forward” but acknowledged risks. “We’re not naïve about this,” he said. “We absolutely are aware of the dangers of backsliding. And if that takes place, we’ll respond accordingly. But this really is a moment that we didn’t want to miss.”

In Myanmar, the visit is seen as a validation of the move from military rule. “Obama’s visit is the first after he was re-elected,” said Htay Oo, vice chairman of the governing Union Solidarity and Development Party. “It means he takes our country seriously.” But he stressed that change was coming from within, not from the United States.

The visit represents a shock to China, which considers Myanmar strategically important because of its access to the Indian Ocean, making it a shortcut for oil deliveries from the Middle East. But privately, some Chinese analysts said China overplayed its hand in tapping Myanmar’s natural resources, citing as an example a backlash against a $3.6 billion hydroelectric dam at Myitsone — a project that was suspended last year amid outrage that 90 percent of its electricity was destined for China, not power-poor Myanmar.

“People make a link in their minds between Chinese investment and previous military rule,” said Yan Myo Thein, a former student activist who writes on politics in Myanmar’s media.

For Mr. Obama, the test in the next few days will be to persuade China’s Asian neighbors that the United States is their partner and, despite doubts, staying in the region for the long haul.

“Despite the current U.S. administration’s bold rhetoric, America will in all probability look increasingly inward, as it has historically been prone to do after major wars,” Bilahari Kausikan, the permanent secretary at Singapore’s Foreign Ministry, told a conference in San Francisco last month. “A period of introspection to lick the political and economic wounds is likely.”

In Visit to Myanmar, Obama Will See a Nation That Shaped His Grandfather

By PETER BAKERNYT

WASHINGTON — When President Obama lands in Yangon on Monday, he will be the first sitting American president to visit the country now known as Myanmar. But he will not be the first Obama to visit.

The president’s Kenyan grandfather, Hussein Onyango Obama, spent part of World War II in what was then called Burma as a cook for a British Army captain. Although details are sometimes debated, the elder Mr. Obama’s Asian experience proved formative just as his grandson’s time growing up in Indonesia did decades later.

“His roots go through Burma,” said Timothy Parsons, an African history professor at Washington University in St. Louis who wrote a book on the colonial East African military. “It is kind of an odd intersection of his life. It’s like the three corners of the triangle come together — America, East Africa and Southeast Asia.”

Thant Myint-U, a Burmese historian and author, said the president may be able to connect with the country in a way another American leader might not. “The Burma that the president will see will look amazingly similar to the Burma his grandfather saw in the 1940s,” he said. “But what will not be readily visible are the effects of more than six decades of armed conflict, half a century of dictatorship and self-imposed isolation and 20 years of Western sanctions. It’s a country that lacks the most basic institutions.”

The president’s grandfather, who went by Onyango, played a key role in the younger Mr. Obama’s life even though the two never met. He was a central figure in Mr. Obama’s voyage of self-discovery captured in his autobiography, “Dreams from My Father,” which describes the journey of a mixed-race American to Kenya to explore his roots.

Onyango Obama, believed to be born in 1895, was a member of the Luo tribe who worked for years as a servant for white colonialists in Kenya. His son, the first Barack Hussein Obama, was the future president’s father. Onyango Obama was described as a strong-willed and stern man, abusive of the multiple women he would marry over his lifetime.

He took the Arabic name Hussein when he converted to Islam and married a Muslim woman while living on the island of Zanzibar. When World War II broke out, according to the stories that the younger Mr. Obama was told, Onyango Obama traveled to Burma, Ceylon and Arabia as a cook for a British captain in the King’s African Rifles. The unit played a crucial role in the Burma campaign, according to scholars.

Some 75,000 Kenyans served in Burma during the war and many of them were transformed by their exposure to the outside world, according to scholars. Many met black soldiers and airmen from the United States, who despite the lingering segregation and discrimination back home, had far more independence and responsibility than the Kenyans serving the British.

Onyango Obama returned home with a picture of a Burmese woman he claimed to have married — “She looked like my mother,” the future president wrote — and a brewing disillusionment with colonial rule. Having been part of the fight for freedom against the Japanese empire, he and other Burma veterans began to rise up for freedom for themselves in Africa. “Like many others, President Obama’s grandfather emerged from wartime service a wiser and more politicized person,” said David M. Anderson, a professor of African politics at the University of Oxford.

Like many of them, Onyango Obama was sympathetic to the Kenyan African Union movement that would later evolve into the more radical Mau Mau rebellion.

When his grandson visited Kenya in the 1980s, he was told that the elder Mr. Obama was arrested by the British in 1949. His fifth wife, relating stories that she was told from before their marriage, later told journalists that Onyango Obama was tortured while in custody, his testicles squeezed with pincers and his nails and buttocks pierced with a sharp pin. The Mau Mau rebellion broke out in 1952 and was brutally suppressed by the British, resulting in the deaths of at least 12,000 Africans. Onyango Obama reportedly died in 1979.

The stories of abuse fueled speculation when President Obama took office in 2009 that he resented Britain and would not value the “special relationship” between Washington and London as his predecessors had. Some in the British news media even interpreted the return of a Winston Churchill bust that sat in the Oval Office under President George W. Bush as a reaction to what happened to Mr. Obama’s grandfather, never mind that another Churchill bust remains in the White House.

But a new book this year suggested that Onyango Obama was never actually arrested, much less tortured. In “Barack Obama: The Story,” his biography of the president, the Washington Post journalist David Maraniss reported that five associates of the elder Mr. Obama “said they doubted the story or were certain it did not happen.” One of his daughters said he had once been kidnapped, meaning perhaps that the story had become twisted over the years.

Either way, Burma was a place of awakening for Mr. Obama’s grandfather, a place where larger possibilities first presented themselves. But whatever ambitions he began to harbor then, he could hardly have imagined that seven decades later, his grandson would return to Burma aboard a blue-and-white 747 known as Air Force One.

AFP - Myanmar has taken "positive steps" to reduce its military relationship with North Korea, the White House said ahead of a historic visit by President Barack Obama to Yangon.

Myanmar, also known as Burma, was suspected of pursuing military and nuclear cooperation with Pyongyang during long years of junta rule which ended last year.

"We've had a dialogue with the Burmese government about the need to reduce their relationship with North Korea," Ben Rhodes, a US deputy national security advisor said on Air Force One as Obama flew to Asia.

"We've seen them take some positive steps in that direction. And what we'd like to see, again, is an end to the relationship that has existed between Burma and North Korea."

Rhodes noted that Washington had also begun the early stages of a military-to-military engagement with Myanmar, and hinted that over time, the country could expect to join annual US military exercises with Thailand.

Reports of military cooperation between Myanmar and North Korea have been a cause for concern for Washington and its Asian allies in the past.

Myanmar President Thein Sein, who will host Obama in Yangon on Monday, has denied any covert effort to obtain nuclear weapons technology from North Korea, which is locked in a prolonged atomic showdown with the United States.

A 2010 United Nations report accused Pyongyang of supplying banned nuclear and ballistic equipment to Myanmar, Iran and Syria.

Myanmar has maintained that it is too poor to acquire nuclear weapons and that it has always abided by UN resolutions, even halting a Russia-backed peaceful nuclear research programme because of international concerns.

As it seeks to deepen North Korea's isolation over its nuclear programme, Washington has made intense efforts in recent years to crack down on Pyongyang's trade in nuclear equipment, expertise and ballistic technology.

Obama will become the first sitting US president to travel to Myanmar on Monday, after a first stop in Thailand.

As well as meeting Thein Sein, he will visit democracy champion Aung San Suu Kyi at the lakeside villa where she endured years of house arrest before the sweeping reform drive pioneered by Thein Sein and his nominally civilian administration.

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18 November 2012 - 04H54

Japan to give $615 mln in loans to Myanmar

AFP - Japan is to provide Myanmar with $615 million in government loans, a report said on Sunday, just days after the United States scrapped a ban on most imports from the long-isolated Southeast Asian nation.

Myanmar nominally ended nearly half a century of military rule last year and rapid changes have sparked a widespread lifting of sanctions and a scramble to tap a potentially lucrative market.

Japanese Prime Minister Yoshihiko Noda will make the loans announcement when he meets Myanmar's President Thein Sein on the sidelines on a Southeast Asian summit in Cambodia on Monday, the Nikkei business daily said.

Japan's first low-interest, long-term government loans to Myanmar in nearly three decades will "back up moves by Japanese companies into the country and hold China in check after it increased its influence in Myanmar", it said.

Japan will provide the loans in the fiscal year to March 2013 while the World Bank, the Asian Development Bank and major creditor nations are expected to announce in January they will waive debts owed by Myanmar, the Nikkei said.

The 50 billion yen in loans will be used for three projects including infrastructure related to a Japan-led special economic zone outside former capital Yangon.

The huge Thilawa project is led by a consortium of Japanese companies including Mitsubishi Corp., Sumitomo Corp. and Marubeni Corp., the Nikkei said.

The two other projects are repair work on a thermal power plant near Yangon and infrastructure development in 14 rural regions aimed at reducing poverty.

Japan, with its export-reliant economy, is looking to foster growth in the resource-rich Mekong region, a part of the world that is also being courted by China.

Unlike its Western allies, Japan maintained trade ties and dialogue with Myanmar, warning that a hard line on the then-ruling junta could push it closer to China, its key ally and commercial partner.

The European Union, Canada and Australia have suspended virtually all sanctions. The US move on Friday came ahead of a landmark trip by President Barack Obama to Myanmar.

The Tokyo government has in recent years provided other Asian nations with similar low-interest, long-term loans, known as "yen loans", aimed at boosting economic development, including Vietnam and India.

AFP - Southeast Asian nations will launch talks this week for a giant free trade pact with China, Japan, India and other neighbours aimed at easing the region's reliance on the struggling West.

The planned zone would would span across 16 countries of the Asia-Pacific that currently account for a third of global trade and economic output, making it the biggest free trade area outside the World Trade Organization.

Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, described the initiative as strategically very important to the Asia-Pacific as it would help offset weaknesses in the United States and the European Union.

"Fast growth in trade within the Asia Pacific region could significantly mitigate the weak growth prospects in Asia's traditional growth markets in the EU and US," he told AFP.

"The (pact) could provide the framework for accelerating regional trade and investment flows, reducing the dependence of East Asia on the traditional EU and US export markets and boosting trade amongst Asian developing countries."

Cambodian Prime Minister Hun Sen will launch the start of negotiations for the Regional Comprehensive Economic Partnership (RCEP) on Tuesday in Phnom Penh on the final day of a regional summit.

The RCEP would bring together the 10 members of the Association of Southeast Asian Nations with China, India, Japan, South Korea, Australia and New Zealand.

ASEAN secretary-general Surin Pitsuwan said a successful RCEP would further cement a shift in global economic power from the West towards Asia.

"The trend is already here. It's how to consolidate. This one is going to be a big leap forward if we can make it," he told AFP in an interview on Sunday on the sidelines of an ASEAN leaders' summit.

Diplomats and analysts said the RCEP could also serve as a "counterbalance" to the Trans-Pacific Partnership (TPP), another planned free-trade grouping currently being negotiated by the United States and 10 other countries.

US officials hope that the TPP will eventually snowball into a free trade area of the Asia-Pacific that will link economies spanning Latin America and Asia via the United States.

But in one significant difference, the TPP excludes China while the world's second-biggest economy is foreseen as being a major player in the RCEP.

China has been reluctant to join the TPP, preferring to focus on a free-trade arrangement centred in Asia where it has a bigger influence.

"You can read between the lines," a Southeast Asian diplomat told AFP in regards to China focusing on a free trade pact that does not include the United States.

Indonesia, Southeast Asia's biggest economy, said it was only interested at this point in the China-dominated pact.

"We're only going to be focused on the RCEP," Indonesian Trade Minister Gita Wirjawan told reporters in Phnom Penh.

There are some concerns that a raft of maritime territorial disputes between the major players in the proposed RCEP could hinder the negotiations.

Diplomatic and trade between Japan and China have been severely shaken this year amid an escalating dispute over islands in the East China Sea.

Japan and South Korea have been locked in a similar dispute over different islands, while China and some ASEAN members have also seen tensions soar over competing claims to the South China Sea.

But Surin said the disputes could be managed separately, and that the trend toward closer economic and trade ties could not be stopped.

"The effort is to try to isolate the two issues... economic cooperation, community building in East Asia will have to go forward because everybody is going to benefit from this new architecture," he said.

Surin said the RCEP had a head start compared with the TPP because ASEAN already had existing free trade pacts with China, India, Japan, South Korea Australia and New Zealand to build on.

Nevertheless, there has been no timeframe set for when the pact should be finalised.

AFP - UN peacekeepers' attack helicopters failed to stop rebels in the eastern Democratic Republic of Congo from seizing another town, as the Security Council demanded an end to foreign support for rebels closing on a provincial capital.

Kinshasa meanwhile made fresh accusations against its eastern neighbour Rwanda, saying it was backing the rebel forces.

A United Nations peacekeeping spokesman said the M23 rebels had taken the town of Kibumba. It lies just 25 kilometres (15 miles) north of Goma, the provincial capital of the strife-torn North Kivu province, which borders Rwanda and Uganda.

The rebel victory came despite the UN's decision to send in attack helicopters to support government troops.

In New York meanwhile, the 15-nation Security Council went into an emergency session on the crisis.

With M23 rebels less than 20 kilometres (12 miles) from Goma, the main city in the mineral-rich region, UN leader Ban Ki-moon appealed to Rwanda's President Paul Kagame to "use his influence on M23," said UN peacekeeping chief Herve Ladsous.

Rwanda has denied a report by UN experts that it has backed the rebels. Ladsous said the United Nations could not confirm whether Rwanda is helping the new rebel offensive but told reporters that M23 "attacking forces are well-equipped and very well supplied."

A council statement demanded an end to the M23 advance and "that any and all outside support and supply of equipment to the M23, cease immediately."

It vowed new sanctions against M23 leaders and those who help it breach UN sanctions and an arms embargo.

The latest fighting has forced more than 7,000 people to flee to the already packed Kanyarucinya displaced persons' camp, some 10 kilometres outside Goma.

And fears were growing that the rebels might try to take Goma itself.

Saturday's fighting was just the latest clash this week between the army and the rebels of the M23 group, composed of ethnic Tutsi army mutineers.

While each side blamed the other for the latest violence, the UN's peacekeeping mission, MONUSCO, said the M23 had launched an offensive with heavy weapons early Saturday.

As a result, the UN mission had deployed its peacekeepers to protect civilians.

"As part of this, 10 missions were carried out by (MONUSCO) attack helicopters," it said in a statement.

"MONUSCO firmly condemns the renewal of hostilities. It calls on the M23 to immediately halt its attacks, which have caused a deterioration of the already fragile security and humanitarian situation."

The attack helicopters, provided by Ukraine, were put on standby Friday after the M23 attacked the army just north of Goma.

MONUSCO said the latest fighting was taking place about five kilometres from the Kanyarucinya camp, which currently holds between 60,000 and 80,000 displaced people.

The UN peacekeeping spokesman said government forces and MONUSCO peacekeepers "are attempting to hold off a possible M23 advance toward Goma at Kibati," about 20 kilometres to the north.

"As of right now, UN staff in Goma are gathering at security assembly points to ensure their protection," he said, adding that UN forces in the city and its airport are on "high alert".

The clashes are the most serious in the rebellion since July, when UN attack helicopters were last put into action against the M23.

UN experts have said Rwanda and Uganda back the rebels, a charge fiercely denied by both countries.

As the fighting flared, the DR Congo government and army levelled fresh accusations Saturday that the M23 were getting help from Rwanda.

DR Congo government spokesman Lambert Mende said the latest fighting erupted when 4,000 men in columns had descended on DR Congo territory from Rwanda.

Olivier Hamuli, a DR Congo army spokesman in North Kivu province, said the M23 was clearly receiving support from Rwanda.

"I was at the front line myself, and the shots came from Rwanda," he told AFP.

"When our combat tanks come to shell M23 positions, they are coming under fire... from Rwanda."

Hamuli said the army would launch a new offensive Sunday morning "to retake Kibumba and advance on the M23's positions wherever they are."

As the battle raged Saturday, some 50 soldiers' wives burned tyres on one of Goma's main streets to protest the killing and wounding of their husbands, witnesses said.

The M23 rebels are former fighters in the Tutsi rebel group the National Congress for the Defence of the People (CNDP).

The CNDP was integrated into the DR Congo military under a 2009 peace deal, but the mutineers say they rebelled because the terms of the deal were were never fully implemented.

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November 17, 2012

U.N. Helicopters Strike Rebel Posts in Congo

By REUTERS

KINSHASA, Democratic Republic of Congo (Reuters) — United Nations attack helicopters hit rebel positions in eastern Congo on Saturday after insurgents gained ground in heavy fighting, the United Nations said. The situation led the French Mission at the United Nations to call for an emergency meeting of the Security Council on Saturday afternoon.

The clashes, near the town of Kibumba, mean that the rebels, part of the M23 movement, have advanced to within 18 miles of Goma, the capital of North Kivu Province. That is the closest they have been to Goma since their rebellion began in April.

The governor of North Kivu, Julien Paluku, said the army retreated to the southern outskirts of the town after M23 rebels received support from neighboring Rwanda. Rwanda rejected the accusations, the latest in a string of charges by Congo’s government, and called on both the army and the rebels to halt the fighting.

More than five million people are estimated to have died from violence, hunger and disease in wars in Congo since 1998.

United Nations experts say they have evidence of Rwanda’s support for the rebels and want the United Nations Security Council to impose sanctions on Rwandan officials as a result.

Ambassador Gerard Araud of France called for an emergency meeting of the United Nations Security Council in New York to discuss the matter on Saturday, and the Council issued a unanimous statement that condemned the M23 attacks and demanded an end to “all outside support and supply of equipment to the M23.”

The Council also called on M23 to halt “any further advances towards the city of Goma.” Mr. Paluku said the rebels were “just a few kilometers away, so of course Goma is under threat.” He added that government troops were reorganizing at Kilimanyoka, seven and a half miles north of the city.

The United Nations peacekeeping mission in Congo said army units came under heavy weapons fire early on Saturday morning, forcing civilians to flee and leading the United Nations mission to send its attack helicopters to strike rebel positions south of Kibumba.

Rwanda’s Army has repeatedly sent soldiers into Congo during nearly two decades of conflict in Africa’s Great Lakes region, but Rwanda has vehemently denied accusations that it is supporting the M23 rebels.

The March 23 movement, or M23, was created last spring by Congolese Army defectors who were demanding better pay, armaments and amnesty from war crimes charges. Congo’s government, backed by the United Nations peacekeepers, has been struggling to maintain control.

A rebel spokesman, Vianney Kazarama, said that the rebels were now in control of Kibumba, but that they would not advance any farther.

“We’re stopping here, we’re waiting, we’re not going to Goma,” he said, calling on the government to begin negotiations with the rebels.

PARIS — Days after recognizing the newly formed Syrian opposition council as the “sole representative” of the Syrian people, President François Hollande of France met with its leaders in Paris on Saturday and agreed to install a new Syrian ambassador in France.

The French move comes even before the new council, the National Coalition of Syrian Revolutionary and Opposition Forces, has established a provisional government, which is expected to happen soon.

After the meeting with the council’s leader, Sheik Ahmad Moaz al-Khatib, and his deputies, Mr. Hollande said that his government would raise the issue of lifting a European Union arms embargo against all Syrian forces at a meeting of foreign ministers on Monday in Brussels.

The United States and Europe have been reluctant to provide arms to Syrian rebel forces, which have been joined by Islamist fighters from other countries.

But Mr. Hollande and his government, already providing nonlethal assistance to so-called liberated zones in Syria, have been discussing how to provide military aid, too, so the rebels can better defend their territory. Without a stable opposition zone of reasonable size inside Syria, it is hard for the West to provide military aid, as it did for the Libyan opposition.

In a statement, Mr. Hollande said the arms embargo remained a delicate question. “While the Syrians need military means,” he said, Western governments want to assure themselves that the weapons are under control.

Mr. Hollande said that Mr. Khatib, a former imam of the historic Umayyad Mosque in Damascus, reassured him that the coalition sought to unify the Syrian people. France, the president said, will move quickly to try to assure the council’s “legitimacy and credibility.”

Mr. Khatib said the new envoy to France would be Mounzir Makhous, describing him as “one of the first to speak of liberty” in Syria and an Alawite, the minority sect to which Syria’s president belongs. Mr. Hollande said that France would find housing and an office for the new ambassador, since the current embassy is the property of the Syrian government.

Mr. Hollande and Mr. Khatib and his deputies, Riad Seif and Suhair al-Atassi, also discussed the formation of a provisional government, the problem of Syrian refugees and the protection of liberated zones, French officials said.

On Monday, the three Syrians met in London with representatives of Britain, France, Germany, the United States, Turkey and Qatar. They returned to London on Friday to meet Foreign Secretary William Hague, who said that Britain would consider recognizing the group but that it must be inclusive and protect the rights of minorities.

Turkey and the Gulf Cooperation Council — Saudi Arabia, Bahrain, the United Arab Emirates, Oman, Qatar and Kuwait — have also recognized the new council as Syria’s representative.

On Sunday, Reuters, citing the Israeli army, reported that some Syrian soldiers might have been killed when Israel fired artillery across the border in response to gunfire aimed at its troops in the Golan Heights.